03/08/2026
📊 A few things came up in the comments last time I posted this that were worth correcting directly.
First, the RMD start age. It is 73 for most people -- but if you were born in 1960 or later, your start age is 75. That change came from SECURE 2.0 and still trips people up.
Second, Treasury bond interest. Several people asked whether it is tax-free. It is exempt from state income tax, but it is still subject to federal income tax. Municipal bonds are the ones exempt from federal tax.
The muni bond nuance is worth its own note. Municipal bond interest does not count as taxable income, but it does count toward your MAGI. That matters because MAGI is what the IRS uses to calculate how much of your Social Security is taxable and whether you owe IRMAA surcharges on Medicare. A retiree holding significant muni bonds can have zero federal tax on that income and still trigger a higher Medicare premium bracket because of it.
Social Security taxation works the same way. The thresholds -- $25,000 for single filers, $32,000 for married filing jointly -- are based on provisional income, not AGI. Tax-exempt interest counts toward that calculation.
The tax treatment of each income source in retirement is straightforward in isolation. The interactions between them are where the surprises happen.
