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If you're approaching your required minimum distribution (RMD) deadline, timing matters more than you might think. Deciding whether to take your withdrawal early in the year or wait until the deadline could potentially affect your investment growth and your peace of mind.
For retirees trying to avoid money mistakes, understanding how RMD timing works is an important part of managing retirement income. There's no one-size-fits-all answer. The right move depends on your financial situation, your risk tolerance, and how you plan to use the money.
Here's what to know before deciding when to take your 2026 RMDs.
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Required minimum distributions (RMDs) explained
Required minimum distributions are mandatory withdrawals from certain retirement accounts once you reach a specific age. These rules apply to traditional IRAs, SEP IRAs, SIMPLE IRAs, and most employer-sponsored plans like 401(k)s and 403(b)s.
The government requires these withdrawals because contributions to these accounts were typically made with pre-tax dollars. Eventually, the IRS wants to collect taxes on that money.
It's important to note that Roth IRAs are generally not subject to RMDs during the original owner's lifetime. That distinction can make Roth accounts more flexible for retirement income planning.
RMDs are required by age 73
For most retirees, RMDs must begin once you reach age 73. The deadline for your first RMD is April 1 of the year following the year you reach that age. For workplace retirement plans like 401(k)s, you may be able to delay your first RMD until you retire, depending on your employer's plan rules. However, that exception doesn't apply to traditional IRAs.
After your first withdrawal, all future RMDs must be taken by December 31 each year. Missing that deadline can lead to significant penalties.
There's a 25% tax penalty if you fail to take RMDs at age 73
Failing to take your RMD — or not withdrawing enough — can trigger a steep tax penalty. The IRS may impose an excise tax of 25% on the amount you were supposed to withdraw but didn't. If the mistake is corrected within two years, that penalty may be reduced to 10%. Even so, the cost can be high and easily avoidable with proper planning.
This is one reason some retirees choose to take their RMD earlier in the year — simply to reduce the risk of forgetting or miscalculating the required amount.
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Why you may want to take your RMDs for 2026 now
Taking your RMD earlier in the year can offer a few practical advantages. For one, it removes the risk of missing the deadline, which can help simplify your financial planning.
It can also protect against market volatility. If you're concerned about a potential downturn, withdrawing earlier may allow you to take your distribution before your portfolio value declines.
Additionally, taking your RMD early can help with cash flow planning. If you rely on these funds for living expenses, accessing the money sooner rather than later may provide added flexibility.
Delaying RMDs can help your investments grow
On the other hand, waiting until later in the year can give your investments more time to grow. If markets perform well, delaying your withdrawal could result in a higher account balance before your distribution is calculated.
This approach may make sense if you don't immediately need the income and are comfortable with market fluctuations. It allows your funds to remain invested for as long as possible within the year.
However, this strategy also comes with risk. If markets decline late in the year, your account value — and future growth potential — could take a hit before you withdraw your RMD.
Bottom line
There's no universal answer to when you should take your 2026 RMD. Taking it early can reduce stress and protect against market swings, while waiting may allow for additional growth if conditions are favorable.
A helpful strategy is to align your RMD timing with your broader financial plan. Coordinating withdrawals with your tax bracket, spending needs, and investment outlook can help support a more stress-free retirement.
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