Motley Fool Urges 73+ Retirees to Take 2026 RMDs Early, Citing 25% Penalty Risk

Q: Beyond charity, what are the smartest tax-saving strategies for your required retirement withdrawals?

The smartest tax-saving move beyond charity is usually to shrink future RMDs before they start, mainly through measured Roth conversions and planned withdrawals in lower-income years. RMDs are taxed as ordinary income, and the real danger is not just the tax bill itself. Bigger withdrawals can make more of your Social Security taxable and push you into higher Medicare Part B and Part D premiums through IRMAA. That is why many advisers favor converting part of a traditional IRA or 401(k) to a Roth IRA in the years before RMD age, especially after retirement but before age 73. You pay tax on the conversion now, but future qualified Roth withdrawals are tax-free and Roth IRAs for the original owner have no RMDs. If you are already taking RMDs, timing still matters. It is often wiser to take the first RMD in the year it is due rather than delaying it until April 1 of the next year, because delay can force two taxable RMDs into one year. Spreading withdrawals through the year can also help with cash flow and reduce the risk of selling assets after a market drop. For people still working, the current-employer 401(k) exception can delay RMDs from that plan if they own less than 5% of the company. Some plans also allow IRA roll-ins, which may extend that delay. If you do not need the cash, reinvesting the after-tax proceeds in a taxable brokerage account, using tax-efficient funds, or covering medical costs from an HSA can help limit future tax drag.

1 articles · Updated · The Motley Fool · May 29

2026 RMDs can be taken now, and Motley Fool says retirees 73 or older may benefit from withdrawing early rather than waiting until December if they fear market swings later this year.
The required amount is already fixed by age and Dec. 31, 2025 account balances, so a market drop would force investors to sell more assets to raise the same cash.
A 75-year-old with $500,000 in a traditional IRA would owe about $20,325, based on the IRS Uniform Lifetime Table denominator of 24.6.
Missing the full withdrawal carries a 25% penalty on the amount that should have been taken, adding urgency even though the legal deadline is months away.
The article also points to monthly withdrawals—about $3,388 over six months in that example—as a way to spread timing risk while keeping part of the portfolio invested longer.