Required Minimum Distributions (RMDs) are a normal part of retirement planning for many individuals with tax-deferred retirement accounts.
But an RMD is about more than simply taking money out of an IRA.
The timing, amount, and source of a distribution can affect your taxable income, Medicare costs, charitable giving strategy, and the amount of wealth ultimately passed to your heirs.
For high-net-worth retirees, these considerations can become especially important when substantial assets are held in traditional IRAs or other tax-deferred accounts.
In 2026, several RMD-related rules and limits are worth reviewing, including the rules surrounding first-time RMDs, missed distributions, inherited IRAs, Qualified Charitable Distributions (QCDs), and Qualified Longevity Annuity Contracts (QLACs).
Understanding these rules may help retirees make more informed decisions about how required distributions fit into their broader retirement and wealth strategy.
The information provided here is for educational purposes only and does not constitute personalized financial, tax, or legal advice. Please consult a qualified professional regarding your specific situation.
When Do RMDs Begin?
Under current law, Required Minimum Distributions generally begin at age 73 for individuals subject to the current RMD rules.
For individuals who reach age 74 after December 31, 2032, the applicable RMD age increases to 75.
RMD rules vary depending on the type of retirement account. Traditional IRAs generally require RMDs beginning at age 73, while certain employer-sponsored retirement plans may allow a current employee to delay RMDs until retirement, subject to plan rules and ownership exceptions.
That distinction can become particularly important for retirees who have accumulated substantial retirement assets.
A large traditional IRA may have provided decades of tax-deferred growth, but eventually those assets can create required taxable income during retirement.
This is why RMD planning should not necessarily begin when the first distribution becomes due.
The years leading up to RMD age may provide an opportunity to evaluate how future distributions could affect your overall financial picture.
The Double RMD Trap
One of the most important RMD timing considerations involves your first required distribution.
The IRS generally allows someone taking their first RMD to delay that distribution until April 1 of the year following the year they reach their applicable RMD age.
For example, someone who turns 73 in 2026 may generally delay their first RMD until April 1, 2027.
However, there is an important catch.
The retiree would still generally have another RMD due by December 31, 2027.
That means two RMDs could be taxable in the same calendar year.
Taking two distributions in one year could potentially:
- Increase taxable income
- Push income into a higher tax bracket
- Increase the portion of Social Security benefits subject to taxation
- Affect Medicare income-related adjustments
- Change the tax impact of other investment income
That does not mean delaying the first RMD is always the wrong decision.
There may be situations where delaying a distribution makes sense based on a retiree’s income, tax situation, retirement date, or other circumstances.
The important point is that the decision should be made intentionally rather than simply because the IRS allows the delay.
Why RMD Timing Matters for High-Net-Worth Retirees
For someone with a modest retirement account balance, an RMD may have a relatively limited effect on the overall financial picture.
For a household with significant tax-deferred assets, the impact can be much greater.
Consider a retiree who has accumulated several million dollars across traditional IRAs and other tax-deferred accounts.
Required distributions could eventually create substantial taxable income even if the retiree does not need the money to maintain their lifestyle.
That can make RMD planning part of a larger conversation about:
- Retirement income
- Tax efficiency
- Investment management
- Medicare costs
- Charitable giving
- Estate planning
- Wealth transfer
The objective is not necessarily to avoid RMDs.
Instead, the goal may be to understand how future required distributions fit into the overall retirement strategy and identify opportunities to manage their potential impact.
What Happens If You Miss an RMD?
Missing an RMD can result in a significant penalty.
The SECURE 2.0 Act reduced the penalty for failing to take an RMD from the previous 50% level to 25%. In certain circumstances, the penalty may be reduced to 10% if the missed RMD is corrected within the applicable correction period.
While the changes provide more flexibility for correcting certain errors, avoiding the mistake in the first place remains preferable.
This is especially important for retirees who have multiple retirement accounts or inherited IRAs, where keeping track of distribution requirements can become more complicated.
Working with your financial professional and retirement account custodian may help ensure required distributions are calculated and taken appropriately.
Inherited Traditional IRAs Require Special Attention
RMD planning does not end with the original account owner.
For beneficiaries who inherit traditional IRAs, the rules can become considerably more complicated.
Under the SECURE Act and subsequent IRS guidance, many non-spouse beneficiaries are subject to a 10-year rule, generally requiring the inherited account to be fully distributed by the end of the 10th year following the original owner’s death.
However, the specific distribution requirements depend on factors such as the beneficiary’s relationship to the original account owner, whether the beneficiary qualifies as an eligible designated beneficiary, and whether the original owner had reached their required beginning date.
For some beneficiaries subject to the 10-year rule, annual distributions may also be required during that 10-year period.
This creates an important tax-planning consideration.
Taking the entire inherited IRA in one large distribution could potentially create a significant taxable event.
Instead, some beneficiaries may benefit from considering how distributions could be spread across multiple years based on their income, tax bracket, and long-term financial goals.
For high-net-worth families, inherited retirement accounts can represent a significant portion of the wealth being transferred to the next generation.
The distribution strategy can therefore become part of the family’s broader legacy plan.
Inherited Roth IRAs Can Offer More Flexibility
Inherited Roth IRAs generally have different tax characteristics.
For many non-spouse beneficiaries subject to the 10-year rule, there is generally no requirement to take annual distributions from an inherited Roth IRA during the 10-year period.
However, the account generally must still be fully distributed by the end of that 10th year.
This can provide heirs with greater flexibility over the timing of withdrawals.
Because qualified Roth IRA distributions are generally tax-free, an inherited Roth IRA may also have different planning implications than an inherited traditional IRA.
For beneficiaries who do not immediately need the funds, leaving assets invested for a period of time may allow continued potential growth before the account must ultimately be distributed.
The key is understanding the specific rules that apply to the beneficiary and account.
A 2026 QCD Opportunity
For retirees who are charitably inclined, Qualified Charitable Distributions can provide another potential RMD planning opportunity.
For 2026, the annual QCD limit increased to $111,000 per individual, up from $108,000 in 2025.
A QCD allows an eligible individual who is at least 70½ years old to transfer money directly from an IRA to an eligible charitable organization.
For qualifying individuals, a QCD can satisfy all or part of an RMD while the distribution is generally excluded from taxable income.
For retirees who already give to charity, this can create an opportunity to coordinate retirement distributions and charitable giving as part of a broader tax strategy.
The rules surrounding QCDs can be specific, so retirees should work with their financial and tax professionals to determine whether a QCD is appropriate for their circumstances.
What About QLACs?
Qualified Longevity Annuity Contracts, or QLACs, are another retirement planning tool worth understanding.
The 2026 QLAC limit increased to $210,000, up from $200,000 in 2025.
A QLAC is a type of deferred income annuity that can be purchased using qualifying retirement account assets.
The income can begin at a later age, potentially as late as age 85.
For some retirees, a QLAC may provide a way to address longevity risk by creating a source of guaranteed income later in life.
It can also potentially reduce the amount of retirement assets subject to RMD calculations before the annuity payments begin.
QLACs are not appropriate for everyone, but they illustrate an important point about RMD planning:
Required distributions do not have to be viewed in isolation from retirement income planning.
The right strategy depends on how your retirement assets, income needs, longevity expectations, and broader financial goals fit together.
RMDs Can Affect More Than Your Tax Return
One of the biggest mistakes retirees can make is looking at RMDs solely as an income tax issue.
Higher taxable income can potentially affect other areas of retirement planning.
For example, a larger RMD may contribute to higher Medicare premiums through the Income-Related Monthly Adjustment Amount, or IRMAA.
It may also affect the taxation of Social Security benefits or interact with other sources of taxable income.
For high-net-worth households, these secondary effects can become meaningful.
This is why it can be helpful to consider RMDs alongside:
- Tax bracket management
- Social Security timing
- Medicare planning
- Roth conversions
- Investment income
- Charitable giving
- Estate and legacy planning
A decision that looks beneficial from one perspective may have different consequences when viewed across the entire financial plan.
RMD Planning Should Start Before the First RMD
Waiting until your first RMD is due may mean waiting too long to evaluate your options.
Before RMDs begin, retirees may have greater flexibility to consider strategies such as:
- Roth conversions
- Tax-efficient withdrawals
- Charitable giving strategies
- Account consolidation
- Retirement income planning
- Estate and beneficiary planning
For some retirees, gradually reducing traditional retirement account balances before RMDs begin may help manage future taxable distributions.
However, a strategy that works for one household may not make sense for another.
Current income, projected tax rates, retirement account balances, charitable goals, Social Security benefits, Medicare considerations, and legacy objectives all matter.
The goal is not to find a single “right” RMD strategy. It is to understand the choices available and how they interact.
RMDs and Your Legacy Plan
For high-net-worth families, retirement accounts can represent a significant part of the wealth ultimately transferred to heirs.
That makes RMD planning relevant even when the original account owner does not need the money.
Traditional retirement accounts generally carry different tax consequences for beneficiaries than Roth accounts.
At the same time, inherited IRA rules can create distribution requirements that affect how quickly heirs must withdraw assets and potentially recognize taxable income.
This means retirement account planning should consider not only:
“How much income do I need during retirement?”
but also:
“What happens to these assets when I am gone?”
Coordinating retirement distributions, beneficiary designations, Roth planning, charitable giving, and estate strategies can help families think more intentionally about the transfer of wealth.
How CKS Summit Group Helps Clients Navigate RMD Planning
At CKS Summit Group, we believe retirement planning should look beyond simply accumulating assets.
A successful retirement strategy should consider how those assets will generate income, how taxes may affect that income, and how today’s decisions could influence your long-term wealth and legacy.
Our approach can help clients:
- Evaluate future RMD obligations
- Develop tax-efficient retirement income strategies
- Coordinate withdrawals across different account types
- Evaluate Roth conversion opportunities
- Consider the potential impact of Medicare premiums
- Review Social Security and retirement income strategies
- Evaluate charitable giving opportunities such as QCDs
- Coordinate inherited IRA and beneficiary considerations
- Integrate retirement planning with estate and legacy strategies
- Develop strategies designed to preserve wealth for future generations
For high-net-worth families, these decisions can become increasingly interconnected.
An RMD is not simply a distribution. It can be one piece of a much larger retirement and wealth-preservation strategy.
Frequently Asked Questions
Q1) At what age do RMDs begin?
Under current law, RMDs generally begin at age 73 for individuals subject to the current RMD rules. For individuals who reach age 74 after December 31, 2032, the applicable RMD age is 75.
Q2) Can I delay my first RMD?
Generally, yes. The first RMD may be delayed until April 1 of the year following the year you reach your applicable RMD age. However, delaying the first RMD generally means taking two RMDs in the following calendar year.
Q3) What happens if I take two RMDs in one year?
Both distributions would generally be included in gross income for the year in which they are taken, to the extent the distributions are taxable.
Q4) What is the penalty for missing an RMD?
Under SECURE 2.0, the general penalty for failing to take an RMD was reduced to 25%. In certain circumstances, the penalty may be reduced to 10% if the mistake is corrected within the applicable timeframe.
Q5) What is the 2026 QCD limit?
The 2026 annual limit for Qualified Charitable Distributions is $111,000 per individual, up from $108,000 in 2025. Eligible individuals must generally be at least 70½ years old, and the distribution must be made directly from the IRA to an eligible charity.
Q6) Do inherited IRAs have RMDs?
The rules depend on the type of account, the beneficiary’s relationship to the original owner, whether the beneficiary qualifies as an eligible designated beneficiary, and whether the original owner had reached their required beginning date. Many non-spouse beneficiaries are subject to a 10-year distribution rule, and some beneficiaries may also have annual distribution requirements during that period.
Q7) Do inherited Roth IRAs have RMDs?
For many non-spouse beneficiaries subject to the 10-year rule, inherited Roth IRAs generally do not require annual distributions during the 10-year period. However, the account generally must still be fully distributed by the end of that 10th year.
Q8) What is a QLAC?
A Qualified Longevity Annuity Contract is a type of deferred income annuity that can be purchased with qualifying retirement account assets. The 2026 QLAC limit is $210,000, and income may begin at a later age, potentially as late as age 85.
Q9) Should I wait until I am required to take RMDs before planning for them?
Not necessarily. Planning before RMDs begin may provide greater flexibility to evaluate Roth conversions, withdrawal strategies, charitable giving, and other approaches that could influence future taxable income.
Final Thoughts
Required Minimum Distributions are a reality for many retirees, but they do not have to be treated as an isolated tax event.
The timing of your first RMD, the size of your retirement accounts, the way you handle inherited IRAs, and the strategies you use for charitable giving can all influence your broader financial picture.
For high-net-worth households, the stakes can be even greater.
The goal is not simply to take the required distribution. It is to understand how that distribution fits into your retirement income, tax, healthcare, and legacy strategy.
The earlier you begin planning, the more opportunities you may have to evaluate your options.
CKS Summit Group can help you evaluate how retirement income, tax planning, investment management, and legacy goals can work together as part of a comprehensive retirement strategy.
Contact us today to start the conversation. Visit summitgp.com.
Disclaimer: This content is for informational purposes only and should not be construed as tax, legal, or financial advice. Tax laws and regulations are subject to change. Consult with your qualified financial, tax, or legal professional before making decisions regarding Required Minimum Distributions, inherited retirement accounts, charitable giving, or other financial strategies.
