From bigger withdrawal amounts to smart tax and portfolio moves, these RMD developments are worth a closer look.
For many older adults, required minimum distributions are a non-event: They’ve been spending from their retirement accounts since they stopped working.
But RMDs are unwelcome for many high-income retirees. Although they enjoyed the free tax ride on their traditional tax-deferred accounts in the years leading up to RMDs, they’re often annoyed by the distributions’ implications for their tax bills. Not only are RMDs taxed as ordinary income, but they can also have knock-on tax effects, leading to more tax on Social Security benefits and higher Medicare costs.
The good news for RMD-avoidant seniors is that the RMD starting age has been sliding upward for the past several years. The required beginning date was stuck at 70.5 through 2019, but the original Secure Act moved it to 72 in 2020. Secure 2.0 extended the starting RMD age to 73 in 2023, and the RMD age will move up to age 75 starting in 2033.
Here’s what RMD-subject investors should have on their radars for 2026.
1. RMDs Will Be High Again This Year
Brace yourself: If you need to take an RMD for the 2026 tax year, your RMD amount was effectively “cooked” at the end of 2025. That’s because you look back to your Dec. 31 balance from the previous year to determine the RMD amount for the current year. 2025, like 2023 and 2024, was an excellent year for nearly every major investment type; US and international stocks, of course, but also bonds and cash, thanks to higher yields. Moreover, RMD percentages adjust upward as we age, also contributing to higher withdrawal amounts. That means that the only time your RMD amount won’t be higher than the previous year’s will be if your portfolio has lost value.
2. But They Won’t Cause You to Overspend
Many retirees worry that RMDs could cause them to prematurely deplete their portfolios. Required minimum distributions start comfortingly low at age 73—dividing portfolio value by a life expectancy of 26.5 years translates into a 3.77% withdrawal when RMDs commence. But RMDs ramp up as the years go by: RMDs for 80-year-olds are close to 5%, and they’re 6% for people who are age 85.
Those numbers are well above rules of thumb like the 4% guideline, but retirees shouldn’t be fearful that RMDs will cause them to overspend for a few key reasons. The main one is that older adults can reasonably spend a higher percentage of their portfolios as they age without fear of running out: In our 2025 retirement spending research, we put safe withdrawal rates for people with 20-year time horizons (for example, 75-year-olds) at 5.3%, and our safe withdrawal rate was nearly 7% for people with 15-year time horizons (for example, 80-year-olds).
Additionally, one underdiscussed quirk of RMDs is that the life expectancy factor that you use to calculate your withdrawal amount is higher than the actual life expectancy for someone at that age. That’s because the RMD calculations employ the generous assumption that the account is not just covering the account owner’s life but the life of someone who’s 10 years younger. For example, actuarial tables from the Social Security Administration point to life expectancies of 13 and 15 years for 73-year-old men and women, respectively—but the RMD amount for 73-year-olds is based on a 26.5-year life expectancy. In other words, even though that RMD amount could trigger higher taxes than you might want to pay, it’s unlikely to cause you to run out of money prematurely.
3. You Can Always Reinvest RMDs
In any case, you don’t have to spend your RMD. You do need to withdraw the correct amount from your tax-deferred accounts and pay taxes on those withdrawals, but you can certainly reinvest the funds if you don’t need or want to spend them. Most RMD-subject investors are no longer working, but if you or your spouse happen to be, you can reinvest all or part of the withdrawal back into an IRA, up to the contribution limit ($8,600 in 2026 for people over 50) or your amount of earned income, whichever is lower. If you don’t have earned income, you could always plow the money into a taxable brokerage account. The beauty of going that route is that you can withdraw the money from a taxable brokerage account on your own schedule; gains on the sale of investments you’ve held for at least a year will be taxed at the long-term capital gains rate. And if your heirs inherit those nonretirement-account assets from you, they can benefit from a step-up in cost basis after your death.
4. You Can Use Your RMDs to Improve Your Portfolio
If you’re subject to RMDs in 2026, one strategy that should be a priority is using your withdrawals to improve your portfolio. By targeting specific holdings for withdrawals rather than pulling your RMDs pro rata from all of your positions, you can address any number of portfolio problem spots, especially overconcentration in specific asset classes, sectors, or holdings.
With today’s elevated stock values suggesting lower stock returns going forward, RMD-subject investors might reasonably use their RMDs to trim stocks, indirectly boosting their weightings in safer assets like cash and bonds. For example, a portfolio that included 50% each in US stocks and bonds five years ago would be 64% stocks today, with the remainder in bonds. Trimming equity exposure to supply RMDs is a “chicken” way to rebalance and take risk out of your portfolio, because the funds have to come out and be taxed no matter what.
5. You Can Employ Strategies to Reduce RMDs
Last but not least, there are a few strategies to help reduce RMDs—or at least the taxes that you’ll owe on them. The specific strategy will depend on your life stage.
If you’re still contributing to your retirement accounts, you might consider directing new money to Roth rather than traditional tax-deferred accounts; Roth accounts don’t have RMDs. The trouble is, if you’re in the late stages of your career and in your peak earnings years, it might be better to take the tax break on traditional tax-deferred contributions rather than prioritizing Roth. Ask your financial or tax advisor.
If you’re retired but not yet subject to RMDs, it’s an ideal time to explore strategies to reduce your future RMDs. One of the best is converting traditional IRA assets to Roth in the postretirement, preRMD years, when incomes are low in many households because working income has stopped, but RMDs haven’t yet come online. The fact that the RMD age has been pushed out to 73 elongates the runway for a series of conversions in that period. Alternatively, lower-income years provide an opportunity to accelerate withdrawals from traditional tax-deferred accounts, spiriting out the funds at a relatively low tax rate and reducing the amount of assets that will eventually be subject to RMDs.
Finally, if you’ve already started taking RMDs, the best option is to take advantage of the qualified charitable distribution, which enables you to steer a portion of your traditional tax-deferred account—up to $111,000 per person in 2026—to a qualified charity. You won’t owe taxes on the QCD amount, the QCD funds can help satisfy your RMD obligations for that year, and those amounts will also reduce your RMD-subject balances going forward. Also, note that QCDs are available to anyone who’s 70.5, versus the age-73.0 threshold that applies to RMDs. A strategy that ticks a lot of boxes is to use a QCD to rebalance, targeting holdings that you wanted to sell otherwise. Not only does that help improve your portfolio, but it also reduces your tax bill, trims your RMD-subject balance, and benefits charity.
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