Updated

Updated · 24/7 Wall St. · Sep 18

Retirees Turning 73 Can Delay 1st RMD to 2027, Risking Higher 2029 Medicare Premiums

Updated

Updated · 24/7 Wall St. · Sep 18

Retirees Turning 73 Can Delay 1st RMD to 2027, Risking Higher 2029 Medicare Premiums

Q: Could delaying your first RMD this year secretly trigger a massive tax trap for your Medicare premiums in 2029?

Yes. Delaying your first required minimum distribution in 2026 can create a real Medicare premium trap in 2029 if it causes two RMDs to land in 2027. The key issue is timing, not tax savings. If you turn 73 in 2026, you can take your first RMD by Dec. 31, 2026, or delay it until April 1, 2027. But if you delay, you still must take your 2027 RMD by Dec. 31, 2027. That means two taxable withdrawals in one year, which can sharply raise adjusted gross income. That higher 2027 income can do more than push part of your income from the 22% bracket into the 24% bracket. It can also make up to 85% of Social Security benefits taxable and, because Medicare uses a two-year lookback, trigger IRMAA surcharges in 2029. For 2026 Medicare figures, higher Part B premiums begin above $109,000 of MAGI for single filers and $218,000 for married couples filing jointly. Crossing a threshold by even a small amount can raise monthly Part B and Part D costs for a full year. Whether this becomes “massive” depends on your other income and account size. A large IRA can make the risk significant. At age 73, the IRS factor is 26.5, so an account of $1.5 million produces an RMD of about $56,600; doubling that in 2027 can easily push income into higher Medicare tiers. Financial planners generally say delaying only makes sense if 2026 income is unusually high and 2027 income will be clearly lower. Otherwise, taking the first RMD in 2026 often avoids the worst tax and Medicare effects.

Q: Could skipping your 2026 retirement withdrawal unleash a hidden tax torpedo that drains your Social Security benefits next year?

Yes. If you turn 73 in 2026 and skip your first required minimum distribution until early 2027, you can trigger the classic “tax torpedo” next year by stacking two taxable IRA withdrawals into 2027. The delayed first RMD is still due by April 1, 2027, and your second RMD must still be taken by Dec. 31, 2027. That can sharply raise ordinary income in one year, which may not only push part of your income into a higher federal bracket, but also make a larger share of Social Security taxable. Under the 2026 thresholds cited in the coverage, combined income above $25,000 for single filers and $32,000 for joint filers starts taxing benefits, and above $34,000 and $44,000 respectively, up to 85% of benefits can be taxed. That is why planners call it a “tax torpedo”: the RMD itself is taxable, and it can also pull more of your Social Security into taxable income, raising your effective marginal rate. Higher 2027 income can also lead to Medicare IRMAA surcharges in 2029 because Medicare looks back two years. For many retirees, taking the first RMD in 2026 is the cleaner option because it spreads income across two years. Delaying tends to make sense only if 2026 income is unusually high and 2027 income is expected to be lower. One practical way to reduce the hit is a qualified charitable distribution from an IRA. A QCD can satisfy some or all of an RMD without increasing taxable income. Roth conversions do not count toward an RMD.

2 articles · Updated · 24/7 Wall St. · Sep 18

April 1, 2027 is the deadline for retirees who turn 73 in 2026 to take their first required minimum distribution, but waiting means a second RMD is still due by Dec. 31, 2027.
Two RMDs landing in 2027 can lift adjusted gross income enough to push income into higher tax brackets, make up to 85% of Social Security benefits taxable, and raise capital-gains and investment-income taxes.
Medicare costs can rise later because IRMAA uses a two-year lookback: 2027 income determines 2029 premiums, with single filers above $109,000 and couples above $218,000 moving off the standard $202.90 Part B rate.
Deferral tends to help only when 2026 income is unusually high and 2027 will be lower; qualified charitable distributions of up to $108,000 can satisfy an RMD without increasing AGI, while missed RMDs can trigger a 25% excise tax.