A little planning today can help you make more confident financial decisions tomorrow.
As we approach the end of 2026, it's a good time to review your retirement accounts and make sure you're prepared for any Required Minimum Distributions (RMDs).
If you've spent decades saving for retirement, you've likely focused on growing and protecting your money. But once you reach a certain age, the IRS requires you to begin withdrawing funds from many tax-deferred retirement accounts.
While these withdrawals may seem like another item on your year-end checklist, they can have a meaningful impact on your taxes, Medicare premiums, and long-term retirement income.
At Akamai Advisors, we believe retirement planning is about more than following the rules. It's about understanding how each financial decision supports the life you've worked so hard to create.
Here are some of the most common questions we hear about RMDs.
1. When do I need to take my RMD for 2026?
For most retirees who are required to take an RMD in 2026, the deadline is December 31, 2026.
If you're turning 73 this year and this is your first required distribution, you generally have until April 1, 2027, to take it.
But there's something important to consider: Delaying your first RMD means you'll need to take two distributions in 2027.
That additional taxable income could push you into a higher tax bracket or affect your Medicare premiums down the road.
Our perspective: Just because you can delay a distribution doesn't necessarily mean you should. We look at your overall income and tax picture to help determine which timing makes the most sense.
2. What happens if I forget to take my RMD?
Missing an RMD can be an expensive mistake.
The IRS generally imposes a 25% penalty on the amount you were required to withdraw but didn't. Fortunately, that penalty may be reduced to 10% if the mistake is corrected within the allowable timeframe. In some circumstances, the IRS may waive the penalty for a reasonable error that is promptly corrected.
Rather than worrying about deadlines, we encourage clients to create a plan for their distributions well before December.
A little organization can go a long way toward avoiding unnecessary penalties.
3. Do I need to take an RMD from every retirement account?
Not necessarily. Different retirement accounts have different rules.
Traditional IRAs, rollover IRAs, SEP IRAs, SIMPLE IRAs, and most employer-sponsored retirement plans are generally subject to RMD requirements.
Roth IRAs, on the other hand, do not require distributions during the original owner's lifetime.
If you have multiple traditional IRAs, you can generally calculate the RMD for each account and withdraw the combined amount from one or more of those IRAs.
However, 401(k) accounts generally have separate distribution requirements.
Inherited retirement accounts also have their own rules, which can vary depending on your relationship to the original owner and when the account was inherited.
Our perspective: Having several retirement accounts can make things complicated. Coordinating your accounts as part of one retirement income strategy can help simplify the process and avoid costly oversights.
4. Can I withdraw more than my required minimum?
Absolutely!
Your RMD is simply the minimum amount you're required to withdraw. You can always take more if you need additional income.
But before withdrawing extra funds, it's worth considering the tax implications.
For example, you might want additional money for travel, helping family members, home improvements, or simply enjoying retirement.
We believe your retirement savings should support the things that matter most to you. The key is creating a thoughtful withdrawal strategy that balances today's needs with tomorrow's financial security.
5. Can I use my RMD to support a charity?
Yes! And for charitably inclined retirees, this can be a particularly valuable planning opportunity.
A Qualified Charitable Distribution (QCD) allows eligible individuals age 70½ or older to transfer money directly from an IRA to a qualified charity.
When properly executed, a QCD can satisfy all or part of your RMD while generally excluding the charitable distribution from your taxable income.
This can be especially helpful if you regularly support your church, nonprofit organizations, or causes close to your heart.
One important distinction: QCDs must come directly from an eligible IRA, not a 401(k).
If your retirement savings are primarily held in an employer-sponsored plan, a rollover to an IRA may create additional planning opportunities.
Our perspective: We love helping clients align their financial resources with their personal values. Charitable giving is one way to create a meaningful legacy while potentially improving tax efficiency.
6. Could my RMD increase my Medicare premiums?
Yes, and this is something many retirees don't realize until it happens.
Medicare Part B and Part D premiums are partially determined by your income from two years earlier.
If your retirement distributions increase your income beyond certain thresholds, you may be subject to an Income-Related Monthly Adjustment Amount, commonly called IRMAA.
That means a larger distribution in 2026 could potentially increase your Medicare premiums in 2028.
This is why we encourage clients to think beyond a single tax year.
Your retirement income, investment withdrawals, Social Security benefits, charitable giving, and tax strategies should all work together.
Retirement Planning Is About More Than Meeting Deadlines
At Akamai Advisors, we take a holistic approach to financial planning because we know that one financial decision often affects several others.
Required Minimum Distributions are a perfect example.
What might seem like a simple annual withdrawal can influence your taxes, Medicare costs, charitable giving opportunities, and the longevity of your retirement savings.
Our goal is to help you understand your options, make informed decisions, and feel confident about your financial future.
Before December 31, take a moment to ask yourself:
Have I satisfied my required distributions for 2026?
Am I withdrawing from the right accounts?
Could my distributions affect my taxes or Medicare premiums?
Would charitable giving or other tax-planning strategies benefit my situation?
Does my withdrawal strategy support my long-term retirement goals?
If you're unsure about any of these questions, we're here to help.
Because being wise with your wealth isn't just about what you've saved. It's about making thoughtful decisions with what you've built, and intentional planning around what you KEEP!
Let's Have a Conversation
Whether you're approaching your first RMD or have been taking distributions for years, our team at Akamai Advisors can help you look at the bigger picture.
Together, we can explore how your retirement income, investments, tax considerations, and legacy goals fit into a coordinated financial plan.
Click Here to schedule a conversation.
Financial Planning and Advisory Services are offered through Prosperity Capital Advisors (“Prosperity”), an SEC-registered investment adviser. Registration as an investment adviser does not imply a certain level of skill or training. Prosperity does not provide tax or legal advice. For more information, please visit www.adviserinfo.sec.gov.