The paycheck
At 3.3%–4%, $2 million produces $66,000 to $80,000 in year one, about $5,500 to $6,667 a month, raised for inflation after that.
With the average couple's Social Security of about $40,260 a year, total income lands near $120,260 before taxes.
The RMD tax bomb
On $2 million in a traditional IRA, the first required withdrawal at 73 is about $75,472. If the account keeps growing, the withdrawals grow too, and the percentage you must take goes up every year.
Those withdrawals pile on top of Social Security and any pension. That's how a couple who planned for a 12% or 22% bracket ends up in a higher one, paying Medicare surcharges two years later.
The widow's penalty
When one spouse dies, the household loses the smaller Social Security check but keeps most of the RMDs, and the survivor files as single the following year. Same income, narrower brackets, higher surcharges.
Planning for the survivor is one of the strongest reasons to convert some IRA money to Roth while you're both alive.
What heirs should know in New Jersey
New Jersey no longer has an estate tax, but it still has an inheritance tax for some beneficiaries. Spouses, children and grandchildren are exempt. Siblings, nieces and nephews generally are not.
Heirs who inherit a traditional IRA usually must empty it within 10 years, often during their own peak earning years. A Roth leaves them a cleaner gift.