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The number
For a typical couple with $1M-$2M in retirement assets, between Social Security, IRAs, real estate, and other accounts, the difference between a planned retirement and an unplanned one is usually $500,000 to $1,000,000+ over a 25-year retirement horizon.
That number does not come from market returns. It does not come from picking better stocks. It does not come from beating the index. It comes from five specific planning decisions, each of which has known math, known dollar costs, and known fixes. None of which your CPA, your AUM advisor, or your estate planner is structurally incentivized to volunteer.
This article puts a dollar amount on each one. The math is approximate but order-of-magnitude estimates for a typical couple with $1M to $2M, not measured data. Your numbers will vary, but the framework is the same.
Decision 1: Social Security claiming age
Claiming at 62 or FRA instead of 70 (for the higher earner)
For each year you delay Social Security past Full Retirement Age (currently 67 for most pre-retirees), your benefit grows by 8% of your full-retirement-age amount, up to age 70 (SSA, delayed retirement credits). With a full retirement age of 67, claiming at 62 pays 70% of that amount and claiming at 70 pays 124% (SSA, early retirement reduction). So the age-70 check is about 77% bigger than the age-62 check. That's not annual return. That's a permanent, inflation-adjusted, lifetime-guaranteed increase in your monthly check.
For a couple with the higher earner deferring to 70 and the lower earner claiming at FRA, the lifetime present-value gain is typically $120,000-$300,000+ depending on longevity, marital status, and the difference between the two spouses' benefits. The higher-earner's deferral also locks in the larger survivor benefit, meaning if the higher earner dies first, the surviving spouse continues to receive the deferred amount for the rest of their life.
The cost of getting this wrong is paid in monthly checks you'll never see. The deferral decision needs to be made between age 62 and 70, and the math is sensitive to your tax bracket, your other income, and the bridge income you have available during the deferral years.
See Should You Claim Social Security at 62, 67, or 70? for the detailed math.
Decision 2: Missed Roth conversion window
Skipping the low-bracket conversion years from 60 to 73
For a couple with $1M-$2M in Traditional IRA balances, there is typically a window between retirement (call it age 62-65) and the start of RMDs at age 73 (age 75 if you were born in 1960 or later; IRS RMD FAQs) where the marginal tax bracket is unusually low. Earned income has stopped. Social Security may not have started (or only partial). RMDs haven't started. Many couples are in the 12% federal bracket during these years, despite having seven-figure IRA balances.
That window is the ideal time to convert pre-tax IRA dollars to Roth. Each dollar converted at 12% federal escapes the 22%-24%+ federal rate the same dollar would face at age 73+ when RMDs combine with Social Security and IRMAA.
For a typical couple converting $80,000-$120,000/yr over 8-10 valley years, the lifetime tax savings is $100,000-$250,000, and that's before considering the SECURE Act 10-year compression on inherited IRAs, which can add another $50,000-$150,000 in heir-side tax savings.
The cost of inaction is paid by you (in higher RMD-era taxes), by your surviving spouse (in single-filer brackets and the widow's penalty), and by your children (in 10-year compression).
See Your IRA Is a Joint Account with Uncle Sam for the mental model, and Roth Conversions: When They Help and When They Do Not for the detailed math.
Decision 3: IRMAA cliffs hit by accident
Chronic IRMAA on Medicare Part B + D
IRMAA (Income-Related Monthly Adjustment Amount) is the surcharge added to your Medicare Part B and D premiums when your Modified Adjusted Gross Income crosses specific thresholds. The thresholds are cliffs. One dollar over the first line and your premiums rise by $95.70 a month per person in 2026 ($81.20 for Part B plus $14.50 for Part D), about $1,148 a year, for an entire year, with a 2-year lookback. One dollar over the second line and the extra cost is $240.40 a month per person, about $2,885 a year (CMS, 2026).
A retiree couple chronically over the first IRMAA threshold pays about $2,300 a year more in Medicare premiums at 2026 rates than they would just below it, and about $5,770 a year more if they are over the second threshold. Over 20 years of Medicare enrollment at 2026 rates: about $46,000 to $115,000 in extra premiums, all of which could have been avoided with a few thousand dollars of careful income management each year.
The decisions that trigger IRMAA: a large Roth conversion done without bracket planning, a one-time IRA withdrawal for a home renovation, a large capital gain from selling a property, an inherited-IRA distribution timing mistake. Each one is fixable in advance. None of them are fixable after the fact, because IRMAA is determined from your tax return two years prior.
See What the IRMAA Cliff Actually Costs Retirees in 2026 for the threshold table and avoidance framework.
Decision 4: Old A/B trust forfeits step-up
Pre-2010 A/B trust still mechanically active
A/B trusts (also called bypass trusts, credit-shelter trusts, or marital-deduction trusts) drafted between 2001 and 2010 were designed to capture both spouses' federal estate-tax exemptions. The exemption at the time was $1M-$3.5M per spouse, and the federal estate tax above the exemption was 45%-55%. The A/B mechanism shielded both exemptions by funneling the first-deceased spouse's share into an irrevocable bypass trust.
The 2026 federal estate exemption is $15M per spouse ($30M per couple), made permanent by the 2025 tax law (IRS, 2026 inflation adjustments). For 99%+ of retirees, the bypass mechanism is no longer needed for estate-tax shielding. But the old A/B trust is still mechanically active, and the irrevocable bypass trust still forfeits the step-up in basis at the second death for any appreciated assets held inside it.
For a couple with $500K-$1M of appreciated real estate or appreciated stock inside the bypass trust mechanism, the forfeited step-up costs heirs $100K-$300K+ in unnecessary capital gains tax when they eventually sell. Add California state tax to that number for California families.
The fix is to revisit the trust. Many old A/B trusts can be modified, decanted, or disclaimed appropriately to restore the step-up. Almost no estate planner will call you to suggest this, because there's no billable event in it from their perspective. The conversation has to start with you.
Decision 5: No income floor, full exposure to sequence-of-returns
Forced to sell into a 30%+ drawdown in years 1-5
Sequence-of-returns risk is the math problem where two retirees with identical average returns can end up with wildly different outcomes depending on when the bad years happen. Bad early years (the "red zone" of years -5 to +10 around retirement) force you to sell shares at depressed prices, which permanently reduces the portfolio's ability to recover.
The defense is an income floor: cover your essential spending with guaranteed income sources (Social Security, pensions) plus a cash or Treasury-ladder buffer so the portfolio is not your survival vehicle in years 1-10 of retirement. The portfolio becomes discretionary money that can ride out volatility.
For a retiree without an income floor who hits a 30%+ drawdown in years 1-5, the typical permanent portfolio impairment is $300,000-$1,000,000+ over the retirement horizon, and in some cases (like 2000-2002 or 2008-2009 sequences), the impairment is enough to actually run out of money before death.
The income floor doesn't have to be a complete substitute for the portfolio. Covering even 40%-60% of essential expenses with guaranteed income dramatically reduces the sequence-risk math, because the portfolio is only being asked to fund the variable, discretionary portion.
See Sequence-of-Returns Risk: Why the First 5 Years of Retirement Decide Everything for the framework.
The total
| Decision | Typical Cost Range | Who Should Have Told You |
|---|---|---|
| 1. Suboptimal Social Security claiming | $120,000 to $300,000 | Your CFP (but they don't get paid on SS) |
| 2. Missed Roth conversion window | $100,000 to $250,000 | Your CPA (but it's unbillable strategy) |
| 3. Chronic IRMAA | $46,000 to $115,000 | Your CPA + Medicare planner (rare combo) |
| 4. Forfeited step-up on old A/B trust | $200,000 to $400,000 | Your estate planner (they don't revisit) |
| 5. No income floor, sequence risk | $300,000 to $1,000,000+ | Your advisor (sequence planning is rarely billed) |
| Total range | $766,000 to $2,065,000+ | n/a |
The realistic mid-range for the typical $1M-$2M retiree, accounting for some decisions being made well and others poorly: $500,000-$1,000,000 left on the table.
That number is not theoretical. A common pattern: a 65-year-old couple with a 30-year relationship with their AUM advisor, no Roth conversions ever done, Social Security claimed at FRA without analysis, an A/B trust drafted in 2007 still mechanically active, no income floor, full equity exposure entering retirement. Total leakage typically $700,000-$900,000.
The fix for each decision is known and well-documented. The fix has to start with you, because the structural map (see Every Retirement Pro Is Biased) explains why none of your current professionals will start the conversation.
Check these 5 decisions against your own numbers
Use the free calculators to test each one: Social Security claiming age, Roth conversions, IRMAA and how long your savings last. Free, and nothing is sold.
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Hans Goldstein, EA
Founder & Executive Director · Retirement Literacy Foundation, a 501(c)(3) non-profit
Admitted to practice before the IRS
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