By Andy Ives, CFP®, AIF®
IRA Analyst
It’s a new year, and the slate is wiped clean. Here we go again! While we are only one week into 2026, there are some important IRA and work plan transactions to be aware of:
First RMDs. For anyone turning age 73 in 2026, this year is your first required minimum distribution (RMD) year (assuming the still-working exception does not apply to your workplace retirement plan). Divide your 2025 year-end IRA or plan balance by the applicable life expectancy factor to determine your initial RMD. Typically, the Uniform Lifetime Table is used. The corresponding factor for a 73-year-old from this table is 26.5. This first RMD can be delayed until as late as April 1, 2027. All future RMDs (including the RMD applicable to 2027) must be taken by December 31 of that year.
QCDs. Speaking of first-time RMD takers, know that all or a portion of your IRA RMD can be offset with a qualified charitable distribution (QCD). The permitted QCD age is 70½, and the annual QCD limit for 2026 is increased to $111,000. Any IRA dollars sent directly to charity via QCD are excluded from income. If a QCD check is made payable to a charity but sent to the IRA owner for hand delivery, that qualifies as a valid QCD. Also note that QCDs are not available from workplace plans like a 401(k). QCDs are for IRAs only.
Roth Conversions. Roth conversions should be considered by every IRA owner and retirement plan participant. That does not mean a Roth conversion makes sense for every person, but it must be a topic of discussion. Be aware that there is no such thing as a “prior-year conversion.” It’s too late to do a conversion for 2025. Any conversions done in 2026 will be taxable in 2026 and have a January 1, 2026 start to the 5-year conversion clock. Also, Roth conversions are not an all-or-nothing proposition. Smaller partial conversions throughout the year are acceptable. This can help smooth out market volatility and can alleviate concerns about converting at a market peak. Think of it as “dollar-cost averaging” into a Roth IRA or the Roth portion of a plan.
IRA Contributions. While Roth conversions cannot be done for the previous year, IRA contributions can still be made for 2025. The deadline to make a prior-year 2025 traditional or Roth IRA contribution is April 15, 2026. And if you have extra cash in your pocket, there is no reason you can’t also make a 2026 IRA contribution at the same time. The 2025 contribution limits are $7,000, plus $1,000 for those age 50 and older. For 2026, those limits increase to $7,500 and $1,100, respectively.
401(k) Plan Contribution Limits. The limits for contributing to a work plan like a 401(k) have also increased for 2026. The “regular” contribution amount is now $24,500, and the standard age-50-and-older catch-up is $8,000. So, for those who qualify, who have access to a work plan, and who have extra income to be able to sock money away for retirement, the combined IRA and 401(k) contributions/salary deferrals are significant.
Beneficiary Form Review. While this is not technically an IRA or work plan transaction, the new year is a good reminder to review beneficiary forms on all accounts. Life happens and things may have changed. Be sure all beneficiary forms are updated. It’s a new year. Time to get after it!
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/2026-here-we-go-again/