Most people would expect their taxes to go down if their household income dropped.
But after one spouse dies, that is not always what happens.
In this video, I walk through an example of a retired couple I’ll call Sam and Sally. They are both over 65, have about $2 million in traditional IRAs, withdraw $100,000 a year, and receive $75,000 a year from Social Security.
Based on the numbers I ran, their federal income tax is about $15,500. Then Sam dies.
Sally no longer receives both Social Security benefits, so her household income falls by $30,000. But once she begins filing as a single taxpayer, her federal tax bill actually increases to about $21,000.
Less income. Higher taxes.
Here’s why that can happen.
How the widow's penalty can increase taxes
One of the biggest changes after the death of a spouse is the move from married filing jointly to filing as a single taxpayer.
The federal tax brackets for a single filer are much narrower.
Using 2026 tax brackets, the 22% federal income tax bracket begins above $100,800 of taxable income for a married couple filing jointly. For a single taxpayer, it begins above $50,400.
That can make a big difference.
In the example from the video, Sam and Sally have about $175,000 of gross income while they are both alive. After Sam dies, Sally’s income falls to about $145,000.
Yet because she is now filing as a single taxpayer, more of that income is pushed into higher tax brackets.
That is one of the main reasons her federal tax bill can rise even though less money is coming into the household.
Social Security income also changes
When one spouse dies, the surviving spouse does not continue receiving both Social Security checks.
Generally, the survivor keeps the larger benefit.
In Sam and Sally’s case, their combined Social Security income was about $75,000. After Sam dies, Sally is left with approximately $45,000.
That is where the $30,000 decline in household income comes from.
But her living expenses do not necessarily fall by $30,000.
Property taxes, homeowners insurance, utilities, maintenance and many other household costs may stay relatively similar. That can mean Sally still needs to withdraw a meaningful amount from her IRA to maintain her lifestyle.
Those withdrawals create taxable income.
Medicare premiums can become another issue
Taxes are not the only thing that can change.
Medicare’s income-related surcharge, commonly known as IRMAA, also has much lower income thresholds for a single person than for a married couple.
That means a surviving spouse may find herself paying higher Medicare premiums even though household income has gone down.
This is one reason retirement tax planning should not focus only on the current year’s federal tax bracket.
IRA withdrawals, Roth conversions, Social Security taxation and Medicare premiums can all affect one another.
Required minimum distributions can make the problem larger later
There is another issue that can become more important as the surviving spouse gets older.
Required minimum distributions from traditional IRAs increase as a percentage of the account balance over time.
If Sally still has a large traditional IRA, she may eventually be required to withdraw more than she actually needs to spend.
Those Traditional IRA withdrawals are taxable whether she needs the money or not.
That can push additional income into higher single-filer tax brackets and may also affect Medicare premiums.
So simply saying, “I’ll spend less after my spouse dies,” does not necessarily solve the tax problem.
Planning while both spouses are alive can help
This is why it can be useful to model retirement in two different ways.
First, look at the years when both spouses are alive and filing jointly.
Then look at what the same plan could look like for the surviving spouse.
For some couples, that may create an opportunity to do Roth conversions while they are still filing jointly.
For example, converting $50,000 a year during lower-tax years could reduce the amount left in traditional IRAs later, potentially lowering future required minimum distributions for the surviving spouse.
That does not mean Roth conversions are always the answer.
You still need to compare today’s tax cost with future tax rates, Medicare premiums, spending needs and the size of future RMDs.
The important part is making the comparison while you still have options.
Look at both versions of retirement
No one knows which spouse will live longer or exactly what tax laws will look like years from now.
The goal is not to predict the future perfectly.
It is to make sure your retirement plan considers more than the years when both spouses are alive.
For married couples with significant retirement savings, the surviving spouse’s tax picture can look very different.
Understanding that ahead of time can create planning opportunities that may not be available later.