How to Handle RMDs
March 5, 2026
For retirees who have already reached the age for Required Minimum Distributions (RMDs), 2026 will bring about more changes you need to be aware of.
A primary concern for 2026 is the timing of the first RMD if you are reaching the first qualifying age of 73. Retirees may delay their initial withdrawal until April 1, 2027. However, if turning 73 this year, doing so triggers the “double‑RMD” effect- requiring two taxable distributions in the same calendar year. This may be a viable strategy, but consideration should be made to how any RMD payment could affect your tax bracket or the percentage of your Social Security benefits that may be subject to taxation.
Another change benefiting retirees in 2026 is the reduced penalty for missed RMDs. Previously a steep 50%, the excise tax has been lowered to 25%. That penalty can also be lessened to just 10% if corrected within two years. This may provide significant relief for those who inadvertently miscalculate or overlook their distribution.
The IRS has also updated life expectancy tables, resulting in slightly smaller RMDs for many retirees. Longer projected lifespans mean larger divisors in the calculation, which translates to lower required withdrawals—and consequently lower taxable income.
Additionally, Qualified Charitable Distributions (QCDs) continue to be an alternative to collecting—and paying taxes on—RMD obligations. Available beginning at age 70½, QCDs allow retirees to direct up to $100,000 annually from IRAs to charity, satisfying some or all of their RMD while excluding the donated amount from taxable income.
An insightful team of professionals can help you navigate your unique RMD decisions. Contact us today to schedule a meeting and find the best plan for you!
Source: https://nationaltaxreports.com/rmd-trends-changes-and-updates-in-2026/