March 25, 2026
Required Minimum Distributions (RMDs): What to Know for 2026
By Elliot Palabe, CFP®
Introduction
Required Minimum Distributions (RMDs) are a key component of retirement planning, particularly for individuals with tax-deferred accounts such as traditional IRAs and 401(k)s. While these rules have existed for decades, recent legislation—most notably the SECURE 2.0 Act—has introduced meaningful changes that continue to impact retirees in 2026.
Understanding when RMDs begin, how they are calculated, and what new rules apply can help you avoid unnecessary taxes and penalties while integrating distributions into a broader retirement income strategy.
1. When Do RMDs Begin?
Under current law, individuals must begin taking RMDs at age 73 if they were born between 1951 and 1959¹.
Your first RMD must be taken by April 1 of the year following the year you turn 73, with all subsequent distributions required by December 31 each year².
Planning note:
Delaying your first RMD until April 1 will result in you needing to take two distributions in the same year, potentially increasing your taxable income.
2. Which Accounts Are Subject to RMDs?
RMDs apply to most tax-deferred retirement accounts, including:
- Traditional IRAs
- Traditional SEP and SIMPLE IRAs
- Traditional 401(k), 403(b), and similar employer-sponsored plans
These accounts have received tax-deferred treatment, so distributions are generally taxed as ordinary income when withdrawn².
Importantly, Roth IRAs are not subject to RMDs during the original owner’s lifetime, and beginning in 2024, Roth 401(k)s are also exempt from RMDs for the original owner¹.
If you have multiple Traditional 401(k) accounts, make sure you are taking your RMDs from each 401K account (your IRAs are considered in aggregate and you can distribute from any account.)
Sometimes, participants forget to take RMDs from their 401Ks from a previous employer. There is a 25% penalty for not taking the distribution.
If you continue to work for an employer, you do not need to start RMDs from the plan in which you are employed until you retire and reach age 73.
Planning note:
Account type matters. Tax diversification can provide flexibility when managing required distributions.
3. Key Changes Still Impacting 2026
Several provisions from the SECURE 2.0 Act continue to shape RMD planning in 2026:
- Higher RMD Starting Age: Increased to age 73 (and scheduled to rise to 75 in 2033)¹
- Lower Penalties: The penalty for missing an RMD has been reduced from 50% to 25%, and potentially to 10% if corrected promptly²
- Roth 401(k) Changes: No RMDs required for original owners starting in 2024¹
In addition, the IRS continues to refine technical rules—particularly around inherited accounts—with some implementation timelines extended to allow for further guidance³.
Planning note:
While penalties are lower, missed RMDs can still create costly tax consequences if not corrected.
4. Inherited IRA Rules Continue to Evolve
One of the most complex areas of RMD planning involves inherited retirement accounts.
Under the SECURE Act and subsequent guidance:
- Many non-spouse beneficiaries must withdraw the full account balance within 10 years
- Annual distributions may be required during that period, depending on the original owner’s RMD status
Final regulations issued and updated guidance continue to clarify these rules, but some provisions remain subject to interpretation while the IRS finalizes details³.
Planning note:
Inherited account rules are complex and still evolving—coordination with a financial professional is critical.
5. Planning Opportunities Around RMDs
While RMDs are mandatory, they can also present planning opportunities:
- Roth Conversions: Completing conversions before RMDs begin may help reduce future taxable income
- Qualified Charitable Distributions (QCDs): Individuals age 70½ or older may direct distributions to charities, potentially reducing taxable income
- Income Smoothing: Strategically timing withdrawals may help manage tax brackets and Medicare premium thresholds
In 2026, with more flexibility under SECURE 2.0, proactive planning can play a meaningful role in long-term tax efficiency⁴.
Planning note:
RMDs should not be viewed in isolation—they are part of a broader income and tax strategy.
Closing Thoughts
RMDs are often one of the largest drivers of taxable income in retirement. Without proper planning, they can increase tax liability, impact Social Security taxation, and potentially raise Medicare premiums.
Integrating RMD strategies with other income sources—such as pensions, Social Security, and investment withdrawals—can help create a more tax-efficient and sustainable retirement plan.
Key Considerations
RMD rules in 2026 reflect a shift toward greater flexibility, but they also require careful coordination. Understanding when distributions begin, how rules apply to different account types, and how recent legislative changes affect your situation is essential.
At Palabe Wealth, we help clients integrate RMD strategies into a comprehensive retirement plan designed to manage taxes, preserve assets, and provide long-term confidence.
As always, Palabe Wealth is here to help. If you have any questions regarding your retirement plan, please feel free to reach out at elliot.palabe@lpl.com.
References
- SECURE 2.0 Act of 2022; IRS RMD Age Provisions.
- IRS Guidance on Required Minimum Distributions and Penalties.
- IRS Announcement 2026-7 and Proposed RMD Regulations Updates.
- 2026 Retirement Planning Guidance and SECURE 2.0 Updates.
Disclosures
This material is for general informational purposes only and is not intended to provide specific tax, legal, or investment advice. Individuals should consult with their tax advisor, financial professional, or attorney regarding their unique circumstances. Past performance is no guarantee of future results. Investing involves risk, including possible loss of principal. Securities and advisory services offered through LPL Financial, a registered investment advisor and member FINRA/SIPC. Palabe Wealth and LPL Financial are separate entities.
Elliot Palabe, CFP®
Elliot Palabe is a Wealth Advisor at Palabe Wealth, where he plays a pivotal role in designing comprehensive retirement plans and working directly with clients to address their financial needs. Elliot's expertise lies in his ability to combine personalized Financial Planning with strategic Tax Planning, helping to ensure that each client's financial strategy is both optimized and aligned with their individual goals and circumstances.
Elliot has a solid educational foundation that underpins his professional acumen, as he holds a Bachelor’s degree in Finance from the Foster College of Business at Bradley University. His academic background has provided him with a deep understanding of financial markets, investment strategies, and economic principles.
Elliot is a CERTIFIED FINANCIAL PLANNER™ professional. He holds several critical financial industry licenses, including the Series 65, 63, 6, and SIE, held through LPL Financial. These qualifications enable him to offer comprehensive investment guidance and demonstrate his thorough knowledge of the financial services industry.
A specialist in the use of sophisticated financial planning and tax planning software, Elliot brings a technological edge to his approach. This expertise allows him to create detailed and highly personalized financial plans that can adapt to changing market conditions and tax environments. By leveraging cutting-edge technology, Elliot ensures that Palabe Wealth's clients receive the most accurate, up-to-date, and effective financial advice possible.
His work is instrumental in helping clients navigate the complexities of financial planning and retirement preparation, helping to ensure they are well-positioned to pursue their long-term financial objectives.
Outside of work, Elliot competes in pickleball. The game’s blend of strategy and precision reflects the same qualities he brings to financial advising - thoughtful planning, attention to detail, and focus.
