Post OBBB: 2026 IRA Client Checklist
With the busy holiday season well behind us, many clients are now looking forward to their financial goals for the 2026 new year. It’s never too early for clients to start working toward their retirement planning goals now that 2026 is officially here. In fact, the sooner clients begin evaluating their options and the changes that 2026 will bring, the greater the likelihood that they’ll achieve those goals. While many transactional deadlines aren’t until year-end, other deadlines arrive in just a few short months—and many clients may benefit from a more structured approach throughout the year. In all cases, early planning and a checklist-like approach to evaluating available options can be the key to achieving retirement planning goals in the new year.
Required Minimum Distributions in 2026
Clients who reached age 73 during the 2025 tax year have until April 1, 2026, to take their first required distribution from traditional IRAs and company-sponsored 401(k)s (assuming they didn’t take their first distribution during 2025).
Clients to reach age 73 in 2026 will be required to take their first required minimum distribution (RMD) by April 1, 2027. However, those clients should be advised that if they wait until 2027, they’ll also be required to take their 2027 RMD by December 31, 2027 (the three-month grace period applies only for the first RMD year). Taking two distributions in one year will, of course, result in higher tax liability during that single year assuming the client doesn’t anticipate dropping into a lower tax bracket during 2027.
To calculate the 2026 RMD amount, clients divide their account balance as of December 31, 2025 by the life expectancy factor contained in the IRS Uniform Lifetime Table (this factor is based on the client’s age). RMDs for IRAs and RMDs for 401(k)s are calculated separately—and the client should be advised that they may be entitled to delay 401(k) RMDs if they continue to work for the employer sponsoring the plan (under the “still working” exception).
Clients who are looking to reduce the tax impact of their RMD obligations may wish to explore the qualified charitable distribution (QCD) option. The QCD option allows clients to use their RMD funds to accomplish their charitable goals—and when the requirements of the QCD provisions are met, those amounts can be excluded from taxable income.
Contributions and Conversions
Taxpayers can continue to make 2025 contributions to IRAs up until the April 15 tax filing deadline. Of course, they can also start making their 2026 IRA contributions now that we’ve entered 2026. For 2026, the applicable contribution limit increased to $7,500, plus a $1,100 catch-up contribution for taxpayers aged 50 and over.
401(k) contribution limits for 2026 are significantly higher ($24,500 for standard contributions, with an additional $8,000 catch-up contribution for those 50 and older). Taxpayers should also be reminded about the new SECURE Act 2.0 “super” catch-up contribution for 2026 ($11,250 for taxpayers aged 60-63).
Taxpayers should always be advised about the benefits of funding a Roth IRA to create a tax-free source of income during retirement. Roth conversions are entirely taxable—and no prior year conversions are permitted. Any conversions executed during 2026 will be included in the client’s taxable income.
Conversions aren’t subject to a rigid schedule. Clients can execute multiple Roth conversions in a single year—and may wish to consider converting when asset values are depressed (for example, in a market dip) to minimize tax liability. Also, remember that no age limits or penalty taxes apply to conversions—the client making the conversion must only include the amount converted in their taxable income for the conversion year.
Conclusion
While each client’s financial picture is different and there’s never a “one size fits all” approach to retirement savings and income planning, using a checklist approach can be valuable in ensuring that clients are apprised of their obligations and options for the new year ahead. Your questions and comments are always welcome. Please post them at our blog, AdvisorFYI, or call the Panel of Experts.