Retirement planning is not a one-time decision. As tax laws evolve and retirement rules change, it is important to periodically review your strategy to ensure it still aligns with your long-term goals.
As we move closer to 2026, retirees and pre-retirees may face several important planning considerations. Ongoing provisions from the SECURE 2.0 Act continue to reshape retirement account rules, while portions of the Tax Cuts and Jobs Act (TCJA) are currently scheduled to sunset at the end of 2025. Together, these changes could affect Required Minimum Distributions (RMDs), tax brackets, retirement account contributions, and overall withdrawal planning.
Understanding these developments early may help provide greater flexibility when evaluating retirement income strategies, tax efficiency, and long-term financial planning opportunities.
TL;DR:
- Current TCJA tax provisions are scheduled to expire after 2025 unless Congress acts.
- The RMD age remains 73 in 2026 for applicable retirees.
- Certain catch-up contributions for higher earners must shift to Roth treatment beginning in 2026.
- The penalty for missed RMDs has been reduced under SECURE 2.0.
- Qualified Charitable Distributions (QCDs) may continue to offer tax-efficient charitable giving opportunities.
- Reviewing withdrawal strategies before 2026 may help retirees better prepare for potential tax changes. Understanding the SECURE 2.0 Changes
Understanding the SECURE 2.0 Changes
The SECURE 2.0 Act introduced a wide range of retirement-related updates over several years. Some provisions have already taken effect, while others continue rolling out through 2026 and beyond.
RMD Rules for 2026
For the 2026 tax year, the Required Minimum Distribution age remains 73 for individuals born between 1951 and 1959. If you turn 73 during 2026, your first RMD generally must be taken by April 1, 2027. However, delaying the first withdrawal into the following year may result in taking two taxable distributions during the same calendar year. Because RMDs are generally taxed as ordinary income, timing decisions may impact overall tax liability depending on your broader financial picture.
Roth Catch-Up Contribution Changes
Beginning in 2026, certain employees age 50 and older who exceed applicable income thresholds may be required to make catch-up contributions to employer-sponsored retirement plans on a Roth (after-tax) basis. Under current law, individuals earning more than $145,000 from their employer in the prior year generally fall under this requirement for eligible catch-up contributions to plans such as:
- 401(k)s
- 403(b)s
- Governmental 457(b) plans
While this means taxes are paid upfront on those contributions, qualified Roth withdrawals may later be tax-free if IRS requirements are met.
Inherited IRA Considerations
Inherited IRA rules remain an important area of retirement planning. Many non-spouse beneficiaries who inherited retirement accounts after 2019 may be subject to the 10-year distribution rule, which generally requires the account to be fully distributed within ten years of the original owner’s death. In certain situations, annual distributions may also apply during that period. Because inherited IRA rules can be highly complex and fact-specific, reviewing guidance directly from the IRS or working with a qualified professional may help to clarify planning opportunities and obligations. IRS guidance can be found here: IRS Inherited IRA Guidance*
Preparing for Potential Tax Changes in 2026
Another major planning consideration involves the scheduled sunset of portions of the Tax Cuts and Jobs Act. Unless Congress extends or modifies current provisions, several federal income tax rates are scheduled to revert to prior levels beginning January 1, 2026. This could potentially affect retirees who rely heavily on:
- Traditional IRA withdrawals
- 401(k) distributions
- Pension income
- Other taxable retirement income sources
Educational resources outlining projected bracket changes are available through organizations such as the Tax Foundation: Tax Foundation Overview of TCJA Expiration Provisions.** While future legislation remains uncertain, many retirees are reviewing strategies now to determine whether current tax rates create planning opportunities before 2026.
Tax-Efficient Withdrawal Strategies to Consider
Every retiree’s financial picture is different, but several commonly discussed strategies may help improve long-term tax flexibility when evaluated appropriately within a broader retirement plan.
1) Roth Conversions
A Roth conversion involves transferring assets from a traditional retirement account into a Roth IRA. Converted amounts are generally taxable in the year of conversion, but future qualified Roth withdrawals may later be tax-free. Some retirees explore partial Roth conversions during lower-income years to potentially reduce future RMD exposure or diversify future tax treatment across accounts. Because Roth conversions may increase current taxable income, careful coordination is important.
2) Qualified Charitable Distributions (QCDs)
For individuals age 70½ or older, Qualified Charitable Distributions may provide a tax-efficient way to support charitable organizations directly from an IRA. QCDs can generally count toward satisfying RMD requirements while excluding the distributed amount from taxable income, subject to IRS rules and limits. For charitably inclined retirees, this strategy may help reduce adjusted gross income while supporting philanthropic goals.
3) Diversifying Income Sources
Retirees often benefit from having multiple “tax buckets” available during retirement, including:
- Taxable accounts
- Tax-deferred retirement accounts
- Roth or tax-free accounts
Having flexibility across multiple account types may help retirees adapt withdrawals based on changing tax environments and spending needs over time.
Frequently Asked Questions
1) When do I need to take my first RMD if I turn 73 in 2026?
Generally, your first RMD would be due by April 1, 2027. Future RMDs would then typically follow annual deadlines by December 31.
2) How could the TCJA sunset affect retirement income?
If current tax provisions expire as scheduled, some retirees may experience higher marginal tax rates beginning in 2026, which could increase taxes on traditional retirement account withdrawals.
3) Are Roth 401(k)s subject to RMDs?
Under current SECURE 2.0 provisions, Roth employer-sponsored retirement accounts are no longer subject to lifetime RMDs for the original account owner.
4) What happens if someone misses an RMD?
Current law reduced the penalty for missed RMDs from prior levels. In some situations, penalties may be reduced further if corrected promptly and appropriate IRS procedures are followed.
5) What is the inherited IRA 10-year rule?
Many non-spouse beneficiaries who inherit retirement accounts after 2019 must generally distribute the full account balance within ten years of the original owner’s death.
Final Thoughts
Changes to retirement legislation and tax laws can create uncertainty, but they may also create opportunities for proactive planning. Reviewing withdrawal strategies, tax exposure, charitable giving plans, and retirement income sources ahead of 2026 may help retirees better position themselves for whatever changes ultimately occurs.
At Unified Legacy Advisors, we believe retirement planning should focus on helping clients make informed decisions with clarity and confidence. A thoughtful, personalized strategy can help coordinate income, taxes, investments, healthcare considerations, and legacy planning into one comprehensive approach. If you would like to review how upcoming retirement and tax changes may affect your financial plan, our team would be happy to help.
Sources:
*IRS, https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary
**Tax Foundation, https://taxfoundation.org/wp-content/uploads/2024/05/Options-for-Navigating-the-2025-Tax-Cuts-and-Jobs-Act-Expirations.pdf