Turning 73 in 2026? Your First Required Minimum Distribution (RMD) Deadline Is Closer Than You May Think.
Turning 73 in 2026? Your First Required Minimum Distribution (RMD) Deadline Is Closer Than You May Think.
Selena Maranjian, The Motley FoolTue, February 3, 2026 at 7:35 AM UTC
0
Key Points -
Certain retirement accounts -- such as traditional IRAs -- feature required minimum distributions (RMDs).
You have some options when it comes to taking your first one.
Your decision could save you some money -- or cost you some.
The $23,760 Social Security bonus most retirees completely overlook ›
If you're not familiar with required minimum distributions (RMDs) and their rules, it could cost you a lot. It's smart to get savvy about RMDs, even if your retirement is years away.
Here's a brief introduction to RMDs and some thoughts on when you might want to take your first one. It's worth reading, even if you're not turning 73 this year.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
A person is resting their chin on their fist, looking thoughtful.
Image source: Getty Images.
Required minimum distribution basics
Most of us would do well to make the most of tax-advantaged retirement accounts -- such as individual retirement accounts (IRAs) and 401(k)s -- as we save and invest for retirement. But with certain such accounts, you'll be expected -- nay, required -- to take required minimum distributions.
RMDs are required to be taken annually from accounts such as traditional IRAs, SEP IRAs, and SIMPLE IRAs once you reach the age of 73. (Roth accounts don't feature RMDs for the original owners of the accounts.)
When you take your RMD, that income will count as taxable income -- so plan for it when you're developing your retirement plan.
Important: When to take your first RMD
If you're turning 73 in 2026 or soon after, take note:
Advertisement
You have until April 1 of the year after you turn 73 to take your first RMD.
After that, though, the deadlines fall on Dec. 31.
Your second RMD will be due on Dec. 31 of the year in which you turn 74.
Here, then, are three key options, assuming you're turning 73 in 2026:
You could take your first RMD in 2026 and your second in 2027.
You could take your first RMD by April 1, 2027 and your second by Dec. 31, 2027.
You could take them in chunks. The annual RMD doesn't need to be taken all at once. The total required amount simply needs to be withdrawn by the deadline.
What to do
If you take your first RMD in 2026 and the next in 2027, you'll be spreading that income across two tax years. If you take them both in 2027, your taxable income will increase more that year -- which could potentially move you into a higher tax bracket. In that scenario, you may owe more in taxes.
Another consideration is the overall market. If your retirement account is mostly invested in stocks and you take your withdrawal early, you could miss out on some gains. But the stock market is unpredictable from month to month, so delaying taking your RMD might force you to liquidate some stocks after a pullback.
If you don't want to worry about your RMD, you could just take it early in the year and be done with it. (Note that many, if not most, good brokerages will let you automate your RMDs, taking them automatically for you at a date you specify. You might still want to double-check to make sure that the RMD has been withdrawn on time.)
Above all, don't be late taking your RMD. The penalty for not taking it on time is 25% of the amount you failed to withdraw on time.
The $23,760 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.
One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.
View the "Social Security secrets" »
The Motley Fool has a disclosure policy.
Source: “AOL Money”
