Retirement & Tax Planning Answers
10 Year-End Money Moves for Retirees 70 and Older in 2026
Quick answer
For retirees 70 and older, the year-end list centers on RMDs and what you do with them. Take every RMD by December 31, remembering that inherited IRAs and each 401(k) need their own. Route charitable giving through QCDs, up to $111,000 per person, and send them in early December. Use withholding on a December RMD to cover the year's tax, since it counts as paid evenly through the year. Review Medicare coverage during Annual Enrollment, October 15 to December 7. Check IRMAA and the senior deduction before taking extra income. Consider Roth conversions if your heirs or a surviving spouse will face higher rates than you do now. Keep one to three years of spending in cash and short-term fixed income. Make annual gifts of up to $19,000 per recipient and fund 529s for grandchildren. Update estate documents and simplify accounts. Revisit the long-term care plan and how the house fits into it. The most important move for most retirees in this group is pairing the RMD with QCDs: every dollar of giving that goes directly from the IRA to charity satisfies the RMD while staying out of AGI, which lowers the tax on Social Security, IRMAA exposure, and the senior deduction phase-out at the same time.
The 10 Moves to Make Before December 31, 2026
A year-end checklist for retirees 70 and older, in the order that usually saves the most tax and prevents the costliest mistakes.
- 1
Take every RMD by December 31
Every traditional IRA, 401(k), and 403(b) you own needs its 2026 RMD out by December 31, 2026. IRA RMDs can be combined and taken from any IRA, and 403(b)s can be combined with each other, but each 401(k) needs its own. Inherited IRAs are separate and cannot be satisfied from your own accounts. If you turned 73 in 2026 (born 1953), your first RMD can wait until April 1, 2027, but then 2027 carries two RMDs on one return. The penalty for a missed RMD is 25%, reduced to 10% if corrected promptly. Build in custodian processing time.
- 2
Give through QCDs instead of cash
If you are 70 1/2 or older, send charitable gifts directly from your IRA as qualified charitable distributions, up to $111,000 per person in 2026. A QCD counts toward your RMD and never appears in AGI. QCDs must come from an IRA, not a 401(k), and cannot go to a donor-advised fund or private foundation. Take QCDs before other IRA withdrawals, since the first dollars out satisfy the RMD. Submit requests in early December so the money leaves the IRA and the charity receives it by December 31, 2026. Keep each charity's written acknowledgment. Skip this only if you do not give to charity.
- 3
Use RMD withholding for the year's taxes
Tax withheld from an IRA distribution is treated as paid evenly through the year, even if it is withheld in December. That makes a December RMD the easiest way to cover the full year's federal tax on Social Security, pension, dividends, and the RMD itself, and to fix any underpayment from earlier quarters. Aim for the safe harbor: 100% of 2025 tax, or 110% if 2025 AGI was over $150,000. Request Arizona withholding on the same distribution. If you pay estimates instead, the fourth-quarter payment is due January 15, 2027. This fits anyone whose pension and Social Security withholding falls short.
- 4
Review Medicare during Annual Enrollment
Medicare Annual Enrollment runs October 15 to December 7, 2026, and changes take effect January 1, 2027. Compare your Part D plan's 2027 formulary, tiers, and preferred pharmacies against your actual prescriptions; plans change them every year. If you have Medicare Advantage, check that your doctors and hospitals remain in network. Switching from Medicare Advantage back to a Medigap policy can require medical underwriting, so think carefully before leaving Medigap. Medicare Advantage enrollees also get a second window, January 1 to March 31, to switch plans or return to Original Medicare. This applies to everyone on Medicare.
- 5
Check IRMAA and the senior deduction first
Before you sell appreciated assets, do a Roth conversion, or take extra IRA money, check where 2026 MAGI will land. It sets your 2028 Medicare premiums, and the 2026 IRMAA tiers begin at $218,000 joint and $109,000 single, with one dollar over triggering the full surcharge for each spouse. The $6,000 per person senior deduction shrinks by 6% of MAGI above $150,000 joint or $75,000 single. Stopping a few thousand dollars under a threshold can save more than the extra income is worth. This matters most for households within about $30,000 of a threshold. The deadline is December 31, 2026.
- 6
Consider Roth conversions for heirs or a spouse
Compare your current bracket to the rate your heirs or a surviving spouse will face. A surviving spouse files single starting the year after the death, with narrower brackets and a $109,000 IRMAA threshold, while RMDs continue. Adult children who inherit traditional IRAs generally must empty them within 10 years, often during peak earning years. If you are in the 12% or 22% bracket and they will be in 32% or higher, converting some each year can lower the family's total tax. In an RMD year, take the RMD first; only dollars above it can be converted. Conversions must be completed by December 31, 2026.
- 7
Hold 1 to 3 years of spending in reserve
Keep one to three years of planned withdrawals beyond Social Security and pension income in cash, money market funds, T-bills, or short-term Treasuries, so a market decline never forces you to sell stocks to fund an RMD or living costs. RMDs can be satisfied in kind, moving shares to a taxable account without selling, if you do not need the cash. Then review the overall allocation against your real horizon and goals. Money earmarked for heirs has their time horizon, not yours, and can stay invested for growth. Rebalance inside IRAs to avoid realizing gains in taxable accounts before December 31, 2026.
- 8
Make annual gifts and fund 529 plans
You can give up to $19,000 per recipient in 2026 ($38,000 from a couple) without filing a gift tax return, and the gift must be completed by December 31, 2026; a check the recipient has not deposited may not count. Tuition and medical bills paid directly to the institution are unlimited and do not use the annual exclusion. Contributions to a 529 plan for a grandchild count as gifts, and a five-year election lets you front-load up to $95,000 per beneficiary. Arizona offers a state income tax deduction for 529 contributions. This fits anyone who expects to leave money to family anyway.
- 9
Update estate documents and simplify accounts
Review your will or revocable living trust, successor trustee, Arizona durable financial power of attorney, health care power of attorney, and living will. Check every beneficiary designation, including IRAs, annuities, and life insurance, since those override your will. An Arizona beneficiary deed can pass real estate outside probate. Write a letter of instruction listing accounts, advisors, passwords, and final wishes. Consolidating scattered IRAs and old 401(k)s into fewer accounts makes RMDs easier and reduces the chance a family member misses something. Arizona has no estate or inheritance tax. There is no year-end deadline, but year-end review keeps it current.
- 10
Revisit the long-term care and home equity plan
Decide which assets would pay for care if you needed it: assisted living runs roughly $70,000 a year, a home health aide roughly $75,000 to $80,000, and a private nursing home room roughly $120,000 to $130,000, with the Phoenix area broadly in line. Identify whether that comes from a long-term care policy, an earmarked portion of the portfolio, or home equity through a sale or reverse mortgage. If you own a policy, confirm the elimination period and daily benefit. Many married couples should plan for one spouse needing care while the other stays at home. This has no hard deadline but belongs in the annual review.
Getting RMD Money Out at the Lowest Total Cost
The RMD is the anchor of every other decision. Your 2026 RMD is your December 31, 2025 balance divided by your Uniform Lifetime divisor: 26.5 at 73, 24.6 at 75, 23.7 at 76, falling each year so the required percentage rises. The aggregation rules matter. Traditional IRA RMDs can be added up and taken from any one IRA, and 403(b) RMDs can be combined among 403(b)s, but each 401(k) needs its own distribution, and inherited IRA RMDs cannot be mixed with your own. A missed RMD carries a 25% excise tax, reduced to 10% if corrected promptly. The first RMD, for anyone who turned 73 in 2026 (born 1953), can wait until April 1, 2027, but then 2027 carries two, which usually costs more than taking the first one this year.
QCDs are the most efficient way to give for anyone who is 70 1/2 or older and charitably inclined. Starting in 2026, non-itemizers can deduct up to $1,000 single or $2,000 joint of cash gifts, and itemizers can only deduct charitable gifts above 0.5% of AGI. A QCD beats both, because it is excluded from income rather than deducted after the fact. That exclusion lowers AGI, which reduces how much Social Security is taxable, keeps MAGI farther from the IRMAA tiers ($218,000 joint, $109,000 single), and protects the $6,000 per person senior deduction, which shrinks by 6% of MAGI above $150,000 joint or $75,000 single. Order matters: the first dollars out of an IRA in a year count toward the RMD, so QCDs should come before any regular withdrawal.
Roth conversions after 70 are a narrower decision than in your 60s, but not a dead one. In an RMD year, the RMD must come out first; only dollars above it can be converted. The question is whose tax rate is lower on those dollars: yours now, a surviving spouse's later, or your heirs'. A surviving spouse files single starting the year after the death, with roughly half the bracket width and the single IRMAA threshold of $109,000, while RMDs continue on the combined IRA. Adult children who inherit a traditional IRA generally must empty it within 10 years, often during their peak earning years, and must take annual RMDs along the way if you had already started yours. Converting at 12% or 22% to spare heirs a 32% or higher rate can make sense. Converting at 32% for heirs in the 22% bracket rarely does.
Withholding from RMDs solves the estimated tax problem most retirees have. Pension, Social Security, interest, and dividend income usually do not have enough tax withheld, and quarterly estimates are easy to forget. Tax withheld from an IRA distribution is treated as paid evenly across the year, no matter when it is actually withheld. That means you can take the full RMD in December, withhold enough to cover the whole year's federal tax, and avoid underpayment penalties for earlier quarters. The safe harbor is 100% of last year's tax, or 110% if AGI was over $150,000. Arizona withholding can be requested on the same distribution (Arizona's flat rate is 2.5%), and Arizona does not tax Social Security.
How to Prioritize the List Before Year-End
Start in October with anything that has a fixed window. Medicare Annual Enrollment runs October 15 to December 7, and changes take effect January 1. Check your Part D plan's 2027 formulary and pharmacy network against your actual prescriptions, since plans change both every year. Order a current RMD statement from each custodian, list every account that needs its own RMD, and confirm whether any 2026 withdrawals have already counted.
In November, run the tax projection. Once you know your RMD, Social Security, pension, and expected dividends and fund distributions, you can see where MAGI lands against the IRMAA tiers and the senior deduction phase-out, and whether there is room in the 12% or 22% bracket for a Roth conversion. Decide your QCD amounts and confirm each charity's legal name and tax ID, since QCDs must go to a qualified public charity, not a donor-advised fund or private foundation.
Execute in the first half of December. Many custodians want RMD, QCD, and conversion instructions by early to mid December, and QCD checks mailed late may not be cashed by December 31. Take QCDs first, then the rest of the RMD with withholding set to cover the full year, then any Roth conversion. Complete gifts to family and 529 contributions by December 31. Estate document reviews and long-term care planning have no year-end deadline, but year-end is a natural time to schedule them before January fills up.
Consider an illustrative household: a married couple, both 76, with $1.8 million in traditional IRAs, $70,000 of combined Social Security, $15,000 of qualified dividends, and $20,000 of annual giving. Their combined RMD is about $76,000 ($1.8 million divided by 23.7). Sending the $20,000 as QCDs leaves $56,000 of taxable RMD, and AGI lands near $130,500. With the $32,200 standard deduction, $3,300 of age 65 add-ons, and $12,000 of senior deduction, taxable income is about $83,000, inside the 12% bracket. A Roth conversion of about $15,000 fills most of the remaining 12% room while keeping MAGI under the $150,000 senior deduction threshold and qualified dividends in the 0% bracket. Withholding from the December RMD covers the year. Illustrative only; actual figures depend on the full return.
Year-End Mistakes Retirees Over 70 Make
- Taking a regular IRA withdrawal early in the year and then making a QCD in December, not realizing the first dollars out already satisfied the RMD and the QCD will not reduce it.
- Assuming one RMD covers everything, when each 401(k) and every inherited IRA needs its own distribution.
- Writing charity checks from a bank account while taking the full RMD as taxable income, instead of sending the same gift as a QCD that stays out of AGI.
- Delaying a first RMD to April 1 of the following year without projecting the cost of two RMDs landing on one return.
- Paying quarterly estimates on a guess, or skipping them, when withholding from a December RMD would cover the year and cure any underpayment.
- Leaving the same Part D plan in place for years without checking whether prescriptions are still on the formulary at the preferred pharmacy.
- Selling highly appreciated taxable holdings late in life to simplify, and paying capital gains tax that a step-up in basis at death would have eliminated for heirs.
Year-End 2026 Deadline Checklist: Retirees 70 and Older
Deadlines reflect 2026 federal rules. Custodian cutoffs for RMDs, QCDs, and conversions are often in early to mid December. Illustrative framework, not a projection of any individual result.
| Move | Real deadline | Who it fits |
|---|---|---|
| Take every RMD | Dec 31, 2026 (April 1, 2027 for a first RMD) | Anyone 73 or older with pre-tax accounts, plus inherited IRA owners |
| QCDs | Funds out of the IRA by Dec 31, 2026; submit in early December | IRA owners 70 1/2 or older who give to charity |
| RMD withholding | Dec 31, 2026 (withholding); Jan 15, 2027 (Q4 estimate) | Retirees whose pension and Social Security withholding falls short |
| Medicare Annual Enrollment | Oct 15 to Dec 7, 2026 | Everyone on Medicare, especially Part D and Advantage enrollees |
| IRMAA and senior deduction check | Dec 31, 2026 | Households within about $30,000 of an IRMAA tier or above $150,000 joint MAGI |
| Roth conversions for heirs or a spouse | Dec 31, 2026 | Retirees in lower brackets than their heirs or a future surviving spouse |
| Cash reserve and allocation | Before year-end RMDs and rebalancing | Anyone drawing from the portfolio for spending |
| Annual gifts and 529s | Gifts completed by Dec 31, 2026 | Anyone planning to leave money to family |
| Estate documents and consolidation | No fixed deadline; review annually | Everyone, especially after a death, move, or new grandchild |
| Long-term care and home equity plan | No fixed deadline; review annually | Anyone without a clear funding plan for care |
Source: Singh PWM planning framework · Verified