A couple aged 73 with $1.5 million in a traditional 401(k) faces a significant tax increase after one spouse's death. Currently, their total income of about $86,600, which includes $30,000 from Social Security, results in a manageable federal tax bill of roughly $5,500. However, upon the death of one spouse, the survivor's tax situation changes drastically. They must file as a single taxpayer, which reduces their standard deduction from $32,200 to $16,100. This change increases their taxable income to around $66,000, pushing them into the 22% tax bracket and raising their tax bill to about $9,200, an increase of approximately $3,700 annually. Additionally, the surviving spouse may face higher Medicare costs due to income-related surcharges. Experts recommend retirees model their tax situation in case of a spouse's death and consider strategies like Roth conversions or Qualified Charitable Distributions (QCDs) to reduce taxable income. This 'widow's tax penalty' can significantly impact retirement income, especially for women who often outlive their partners.