2026 RMD Planning: What Retirees Should Consider Early in the Year 

For many retirees, required minimum distributions often feel like a December issue, something to address once the year is nearly finished. In reality, RMD decisions shape your financial picture throughout the entire year. The timing and structure of distributions can influence taxes, cash flow, Medicare premiums, and the level of flexibility you retain as the year unfolds. 

In 2026, early planning carries added weight. Updated tax brackets and income thresholds affect how RMD dollars layer on top of Social Security, pensions, and portfolio income. Medicare premium tiers are also income based, meaning a single distribution choice can influence costs beyond your tax return. Waiting until late in the year can narrow your options and shift planning from a thoughtful process to a reactive one. 

One of the most common questions retirees ask is straightforward but important: Should an RMD be taken early or later in the year? The answer is rarely universal. It depends on your mix of income sources, your broader tax picture, your charitable priorities, and how much adaptability you want as the year takes shape. 

Why RMD Planning Matters More Than Ever in 2026 

RMDs rarely arrive on their own. They layer on top of the income you already receive from Social Security, pension payments, investment earnings, and rental cash flow. Once an RMD is added, many retirees are surprised by how quickly total income rises and how differently it is treated for tax purposes. 

This layering effect explains why RMDs often carry more impact than expected. A distribution can move income into a higher tax bracket, increase the portion of Social Security that becomes taxable, or raise Medicare premiums tied to income thresholds. What may feel like a routine withdrawal can quietly influence several areas of your financial life at once. 

In 2026, these interactions take on added importance. Changes to tax brackets and income thresholds mean the same RMD amount may fall differently than it did in prior years. For some households, the effect appears as higher taxes. For others, it emerges later through increased Medicare premiums. These outcomes reflect how income is combined rather than errors in planning. 

Timing plays an important role. Taking an RMD earlier in the year can offer flexibility, while waiting may allow assets to remain tax deferred for longer. Neither approach is inherently better. Each creates different considerations. Understanding how timing affects more than cash flow helps clarify its influence on taxes, planning choices, and overall confidence as the year progresses. 

Next Step: Take a moment to outline your expected income sources for 2026 and note where your RMD fits. Seeing how these amounts layer together often highlights why timing is worth considering earlier in the year rather than at the last minute. 

Early vs. Late RMDs: What’s the Difference? 

For many retirees, deciding when to take an RMD can seem deceptively simple: take it early or wait until later in the year. In practice, that timing choice often reflects how you want the year to unfold financially and how much flexibility you prefer as circumstances evolve. 

Reasons Some Retirees Take RMDs Early 

Some retirees choose to take their RMD early in the year because it adds structure and predictability. It can feel similar to setting a pace at the start of a long walk. You know where you stand and have time to adjust if circumstances change. 

Taking an RMD earlier may offer: 

• More consistent cash flow by spreading income across the year 
• Simpler withholding management, particularly for those using RMDs to cover tax obligations 
• Less pressure around deadlines, reducing concern about missing a required distribution 

For retirees who depend on their RMD as part of regular income or who value simplicity, this approach can create a greater sense of ease throughout the year. 

Other retirees choose to wait, often for equally thoughtful reasons. Allowing assets to remain invested longer can support continued tax deferred growth, which may be appealing for those who do not need the income right away. 

Waiting may also align with planning considerations such as: 

• Coordinating with Roth strategies, where taking an RMD later can help manage taxable income earlier in the year 
• Supporting charitable goals, particularly when using qualified charitable distributions 
• Managing uneven income years, when earnings fluctuate due to asset sales, bonuses, or other events 

This approach often suits retirees who prefer to preserve flexibility and respond to how the year develops rather than committing early. 

Neither timing choice is universally right or wrong. The better fit depends on how your income flows, which planning goals matter most, and how much adaptability you want as the year moves forward. 

Next Step: Consider whether predictability or flexibility feels more important for your 2026 plan. That preference often points toward an RMD timing approach worth exploring further. 

How 2026 Income Projections Shape RMD Decisions 

RMD decisions rarely stand on their own. They exist within a broader income picture that includes several moving parts. Understanding how those pieces come together in 2026 can make the difference between a year that feels steady and one that brings unexpected challenges. 

Coordinating RMDs With Other Income Sources 

Most retirees receive income from more than one source. When those streams arrive without coordination, they can unintentionally increase tax exposure and limit flexibility. 

Common income sources to review together include: 

• Social Security, which may become more taxable as overall income rises 
• Pensions and annuities, which often provide steady but inflexible income 
• Portfolio withdrawals, which can vary from year to year 
• Rental or business income, which may fluctuate or arrive unevenly 

It can help to think of these income sources like lanes merging onto a highway. When they all merge at once, congestion builds quickly. With early planning, you can space them out, adjust timing, and create a smoother flow. Projecting income ahead of time makes it easier to see where RMDs fit and whether adjustments elsewhere could help balance the overall picture. 

Avoiding Unintended Bracket or Medicare Tier Creep 

A modest increase in RMDs, a slightly higher portfolio distribution, or an unexpected income event can push total earnings into a higher tax bracket or a new Medicare premium tier. In 2026, updated thresholds mean those lines may sit in different places than they did last year, even if your lifestyle has remained the same. 

Early income projections help surface these pressure points before they become costly. When you can see where your income is likely to land, you gain more control over timing, withholding, and withdrawal decisions instead of reacting after the fact. 

Next Step: Outline your expected income sources for 2026 and note when each one arrives. This simple exercise can help you see where RMD decisions may affect your tax bracket or Medicare premiums and where early planning may help keep your overall picture balanced. 

Using RMDs Strategically in 2026 

RMDs are often viewed as something to get through each year, but with thoughtful planning, they can become a tool that supports simplicity, generosity, and peace of mind. In 2026, being intentional about how and when RMDs are handled can help the rest of the year feel more manageable and less reactive. 

Withholding Taxes from RMDs 

One option many retirees overlook is withholding taxes directly from their RMDs. Rather than relying on quarterly estimated payments or adjusting withholding elsewhere, some choose to have taxes withheld at the time the distribution is taken. 

This approach can help by: 

• Simplifying cash flow and reducing the need to track and submit separate tax payments 

• Spreading tax obligations more evenly when income comes from multiple sources 

• Easing year end administration by addressing taxes gradually throughout the year 

Qualified Charitable Distributions (QCDs) 

For retirees with charitable goals, qualified charitable distributions can be a meaningful way to use RMDs. If you are age 70½ or older, you may direct up to the annual limit from an IRA to a qualified charity, allowing those dollars to move directly from the account to the organization. 

A QCD: 

• Counts toward your RMD requirement 

• Does not increase taxable income 

• May help manage tax brackets and Medicare considerations 

What makes this approach appealing for many families is how it aligns generosity with tax awareness. Rather than taking an RMD, paying tax, and then making a donation from a checking account, the gift is made directly from the IRA to the charity, which often feels more intentional and streamlined. 

Timing matters with this strategy. Charitable priorities are often clearer early in the year, and planning QCDs ahead of time can reduce the pressure that comes with year-end decisions. It also allows giving to reflect values rather than deadlines. 

Next Step: Consider whether withholding or charitable strategies could help your RMD serve a larger purpose in 2026. A brief early-year review can reveal whether your distributions are supporting both your financial plan and what matters most to you. 

How RMD Planning Fits into Broader Retirement Strategy 

RMDs do not exist in isolation. The timing and structure of distributions can influence other planning decisions in ways that are not always obvious at first. When RMDs are coordinated thoughtfully, they can support a more balanced retirement strategy. When they are not, they may narrow options later in the year. 

Coordinating RMDs With Roth Conversions 

One of the most common planning intersections involves RMDs and Roth conversions. Once an RMD is required, that distribution generally needs to be taken first, and it is included in taxable income for the year. That added income can affect how much room remains to consider a Roth conversion without moving into a higher tax bracket. 

This is where timing becomes important. Earlier in the year, before income patterns are fully established, it is easier to see how RMDs may influence conversion flexibility. Waiting until later often narrows the window and can turn a deliberate decision into a more time sensitive one. 

Early year clarity helps reduce these conflicts. It allows you to evaluate whether a conversion fits alongside your RMD rather than competing with it. For many retirees, this coordination is less about emphasizing one strategy and more about maintaining flexibility as the year unfolds. 

RMDs and Legacy Planning 

RMD decisions also influence what ultimately passes to the next generation. Each distribution reduces the balance of your retirement accounts, which changes the size and timing of what heirs may inherit. 

This matters even more under the 10-year inherited IRA rule. Most beneficiaries must now withdraw inherited retirement accounts within ten years, often during their peak earning years. Larger pretax balances can create higher tax pressure for them down the road. 

Thoughtful RMD planning can help shape that outcome. For some families, the goal is to gradually reduce pretax balances over time. For others, it is about coordinating distributions with Roth strategies or charitable plans to support both heirs and causes they care about. 

Next Step: Consider how your RMDs interact with other parts of your plan, especially Roth strategies and legacy goals. A brief early-year review can help you see whether these pieces are working together or unintentionally competing. 

Questions Retirees Should Ask at the Start of 2026 

At the beginning of the year, the most valuable planning tool is not a spreadsheet or a calculator. It is perspective. Asking the right questions early can help you avoid reacting later and bring clarity to decisions that often feel more complex than they need to be. 

Should I take my RMD early or later this year? 

This question is about more than timing. It is about how you want the year to unfold. Taking an RMD early may provide predictability and simplify cash flow. Waiting may preserve flexibility or support other strategies. Neither choice is inherently better, but one may align more closely with how you want to manage income and stress throughout the year. 

How does my RMD affect my tax bracket and Medicare premiums? 

RMDs stack on top of other income, and even modest changes can influence how much you pay in taxes or what you owe for Medicare. Understanding where your income may land in 2026 helps you see whether your RMD creates pressure points or fits comfortably within your overall plan. 

Would a QCD or withholding adjustment make sense? 

For some retirees, directing RMD dollars toward charitable giving or withholding taxes directly from distributions can simplify the year. These options often reduce friction, but only when they align with your values, cash flow needs, and broader tax picture. 

How do RMDs fit into my broader income and legacy goals? 

RMDs are not just about this year’s income. They influence how much remains for future years and what may eventually pass to heirs. Taking a step back to consider how distributions support both your lifestyle and your long-term intentions can bring greater confidence to each decision. 

Next Step: Take a few minutes to reflect on these questions and note which ones feel most relevant to your situation. Those answers often point to where a focused conversation or early-year review may add the most value. 

Conclusion 

If you would like a simple resource to help guide that early-year review, the 2026 Early-Year Tax Moves Guide brings together the key planning areas many retirees consider at the start of the year. It is designed to help you organize your thoughts, understand what has changed for 2026, and identify which topics may be worth closer attention. 

And if you would like to talk through your situation in more detail, our team is here to help you explore your options and make sense of how each decision fits into your overall plan. 

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References 

IRS. (n.d.) Retirement topics – Beneficiary. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary