New RMD Updates for 2026: What Every Retiree Needs to Know
If you’re planning retirement income for 2026, Required Minimum Distributions (RMDs) remain one of the most important, and sometimes confusing, tax and cash-flow rules to manage.
Over the last few years, Congress and the IRS have made several changes that affect when RMDs begin, how they’re calculated, and which accounts they apply to. This post breaks down the key updates heading into 2026, explains practical tax and planning implications, and offers clear steps you can take now to help reduce tax surprises and make your retirement income strategy more efficient.
Quick Summary: The Headlines You Must Know
- The SECURE 2.0 Act permanently raised the RMD starting age to 73 for many taxpayers (and schedules a further increase to age 75 for future cohorts).
- The first-year RMD deadline rule still allows a delay until April 1 of the year after you turn the RMD age, but that can create the “two RMDs in one year” tax effect.
- The IRS has issued updated worksheets and guidance on life-expectancy tables and calculation methods; some proposed regulation effective dates were delayed, so watch plan-specific rules for 2026.
- Several practical rule changes from SECURE 2.0 (including Roth treatment in employer plans and catch-up contribution rules) indirectly affect RMD planning and tax brackets heading into 2026.
What Changed and What’s Staying the Same
1. Age to Start RMDs: Still Rising, But Staged
The most material change affecting “when” RMDs start came from the SECURE 2.0 Act. It raised the RMD starting age to 73 (effective January 1, 2023) for people born in certain years, and it includes a scheduled increase to 75 for later cohorts (effective in the early 2030s). That’s why many people who were previously concerned about taking RMDs at 72 now have more flexibility.
Important nuance: the exact year you must begin RMDs still depends on your birthdate. That means two people close in age could have different first-RMD years. Always check the IRS rules for your specific birth year.
2. The “First Distribution” Timing and the Two-RMD Year Problem
You may still delay your first RMD until April 1 of the year after you reach the RMD age. But if you do, you’ll typically owe two taxable RMDs in that calendar year: the delayed first distribution (reported in that tax year) plus your regular RMD for that same year (due by Dec. 31). That can push you into a higher bracket unexpectedly, so plan accordingly.
3. IRS Technical Updates, Worksheets, and Delayed Effective Dates
The IRS has updated worksheets and guidance (including updated life expectancy tables), but some portions of proposed regulations related to plan valuation and certain complex treatments were delayed or had effective dates adjusted. That means plan administrators must follow IRS guidance closely in 2025–2026 for which technical rules apply immediately versus which will come later.
4. Indirect SECURE 2.0 Effects That Matter for RMD Planning
SECURE 2.0 introduced several changes that don’t alter RMD mechanics directly but affect retirement tax planning: expanded catch-up contribution options for certain ages and Roth conversion/catch-up rules for high earners, elimination of pre-death RMDs from Roth accounts inside employer plans (for distributions before death), and other features. Those provisions change the taxable balances you’ll have at RMD start, and influence strategies like Roth conversions and qualified charitable distributions (QCDs).
How RMDs Are Calculated in 2026
RMD calculation basics haven’t changed: for most accounts, you divide the account balance as of December 31 of the prior year by an IRS life-expectancy factor (from the Uniform Lifetime Table, Joint Life & Last Survivor Table, or the Single Life Table, depending on circumstances). Here’s a practical walk-through:
- Find your account balance: Use the fair market value as of December 31 of the previous year (for a 2026 RMD, use the Dec. 31, 2025 balance).
- Choose the correct divisor: If your spouse is the sole beneficiary and more than ten years younger, use the Joint Life & Last Survivor Table; otherwise, use the Uniform Lifetime Table. The IRS provides worksheets to help pick the right factor.
- Divide and report: Divide the account balance by the life expectancy factor. That’s your RMD for the year; you must withdraw that amount by Dec. 31 (or by April 1 only for your first RMD year if you choose to delay).
Example: If your traditional IRA balance was $500,000 on 12/31/2025 and your life expectancy factor is 24.7 (example number), your 2026 RMD would be $500,000 ÷ 24.7 ≈ $20,243. That amount is taxable as ordinary income in 2026 unless it’s from after-tax contributions.
Tax Consequences and Common Pitfalls for 2026
A. “Two RMDs in One Year” Tax Spike
If you delay your first RMD to April 1, 2026 (because you turned 73 in 2025), you’ll likely need to take another RMD by Dec. 31, 2026, resulting in two taxable distributions in 2026. That can bump you into a higher tax bracket or affect the taxation of Social Security and Medicare IRMAA calculations. Plan for that cash-flow and tax effect if delaying makes sense.
B. Penalty Risk
Failure to take the full RMD can result in a stiff penalty. Historically, that penalty could be up to 50% of the amount not withdrawn; recent IRS guidance has allowed abatements or reductions in some cases, but don’t rely on relief. Treat RMD deadlines as firm.
C. Roths, Employer Plans, and Inheritance Complications
While Roth IRAs continue to be exempt from lifetime RMDs for original owners, SECURE 2.0 changed how Roth accounts inside employer plans are treated pre-death (elimination of RMDs before death for plan Roths). Additionally, inherited IRAs (especially post-2019 death rules) have special 10-year distribution windows and different rules for eligible designated beneficiaries. These distinctions can change both timing and tax exposure, and many of these details remain areas where IRS guidance is evolving into 2026, so consult up-to-date guidance.
Practical Strategies to Manage RMD Impact in 2026
Below are commonly used tactics; not all are appropriate for everyone, but they’re worth evaluating with your advisor.
1. Consider Timely Roth Conversions (But Mind the Tax Bracket)
Converting some traditional IRA dollars to a Roth IRA before RMDs begin (or in lower-income years) can permanently remove that money from future RMD calculations, shrinking future RMDs and future taxable income. Be mindful: conversions trigger tax now, so run year-by-year tax projections to avoid unwanted bracket creep.
2. Use Qualified Charitable Distributions (QCDs)
If you’re age-eligible, QCDs allow direct transfers from an IRA to a charity (up to $100,000 per year) that count toward your RMD but are not taxable income. For 2026, confirm eligibility and limits with the latest IRS guidance and your advisor. QCDs can be powerful for retirees with charitable intent and RMD pressure.
- Coordinate Workplace Plan Roth Options and Rollovers
If you have both pretax and Roth balances in an employer plan, SECURE 2.0’s employer-plan Roth rule changes may make conversions or intra-plan Roth rollovers more attractive. Also, confirm whether your plan allows in-service rollovers to IRAs (for example, to convert to a Roth IRA on your timetable).
4. Time Withdrawals and Tax Management Across Years
Avoid taking your first RMD in April if it would cause two very large distributions in the same year that push you into a higher tax bracket (unless you calculated that the bracket impact is acceptable). Likewise, plan taxable income across other sources (Social Security, capital gains) to smooth bracket exposure.
5. Consider Longevity and Cash-Flow
If you expect to need retirement income later rather than sooner, delaying distributions (within the law) can give tax-deferred growth more time, but also increases future RMDs because of larger account balances. Model the tradeoff: tax now vs. potentially higher future RMDs.
Common Questions (FAQ)
Q: Do I still have to take RMDs in 2026?
A: If you are at or past your applicable RMD starting age (which for many is 73), yes — RMDs are required. For the specific age that applies to your birth year, refer to IRS rules.
Q: Can I avoid RMDs by keeping money in my 401(k)?
A: Not indefinitely. Employer plans may allow workers still employed to delay RMDs from that employer plan until retirement (if you’re a 5% owner rules don’t apply), but IRAs generally require RMDs when you reach the applicable age. Check plan rules and timing carefully.
Q: Are Roth IRAs subject to RMDs?
A: Roth IRAs owned by the original account owner are not subject to lifetime RMDs. However, Roth accounts inside employer plans have different rules; SECURE 2.0 reduced some pre-death RMD implications for plan Roth. Always confirm which account type you hold.
Q: If I miss an RMD, can I fix it?
A: The IRS can reduce penalties if you correct the shortfall promptly and show reasonable cause. Historically, the penalty could be severe; always address missed RMDs immediately with your advisor.
Action Checklist: What to Do Now for 2026
- Review your birth year and confirm the precise first RMD year that applies to you. Use the IRS RMD page or ask your advisor.
- If you may face two RMDs in 2026 (you turned the RMD age in 2025 and delayed to Apr. 1, 2026), run a tax projection to estimate bracket impacts and Medicare IRMAA effects.
- Evaluate Roth conversion opportunities in low-income years, modeling tax cost vs. long-term RMD and tax benefits.
- If charitable giving is planned, calculate QCDs to offset RMDs and reduce taxable income.
- Coordinate with your plan sponsors and custodians to help ensure correct worksheets/tables and any plan amendments are applied for 2026 distributions.
- Schedule a year-end review with your advisor to confirm you’ll take the correct RMD amounts on time and to address any last-minute plan or tax changes.
Final Thoughts From Agemy Financial Strategies
RMDs can feel like an administrative annoyance, but they’re a powerful lever in retirement tax planning, for better or worse. The staged increases in RMD starting age from SECURE 2.0 give many retirees extra flexibility, but they also create complexity: mismatched birth-year rules, delayed IRS technical guidance, and new employer-plan Roth rules all create moving parts for 2026.
Your best defense is proactive planning: calculate projected RMDs, consider Roth conversions or QCDs where appropriate, communicate with plan administrators, and model the tax impact of timing choices like taking the first RMD in April versus December. In many cases, a modest change in distribution timing or a small conversion can save tens of thousands in taxes over a retirement horizon.
Ready to Take Control of Your RMD Strategy?
Navigating new RMD rules can be overwhelming, but you don’t have to do it alone. Agemy Financial Strategies specializes in helping retirees minimize taxes, optimize withdrawals, and build a confident, efficient income plan for every stage of retirement.
Contact Agemy Financial Strategies today to schedule your personalized RMD review and help ensure you’re fully prepared for 2026 and beyond.
