Required minimum distributions from retirement accounts could increase taxable income, potentially reducing Social Security benefits for some retirees.
Retirees aged 73 and older must withdraw required minimum distributions (RMDs) from tax-deferred retirement accounts in 2026, potentially raising taxable income. For example, a $100,000 traditional IRA balance at age 73 requires a $3,774 withdrawal based on IRS calculations.
RMDs are calculated using the prior year-end account balance divided by an IRS-determined factor. While Roth accounts and certain 401(k) plans are exempt, withdrawals from traditional IRAs or 401(k)s may push retirees into higher tax brackets.
Higher taxable income could also trigger taxes on Social Security benefits, increasing overall tax liability for retirees who do not need the withdrawn funds for living expenses.