Skip your 2026 required minimum distribution and the IRS keeps up to 50% of whatever you forgot to pull out—an instant hit that can’t be reversed with a late holiday withdrawal.
What Actually Changed for 2026
SECURE 2.0 pushed the starting age to 73 this year, but the penalty for missing the withdrawal did not move—it remains 25% of the shortfall and can climb to 50% if the error is not corrected within two years as detailed in IRS guidance.
The Boomer Wave Numbers
- 4.1 million Americans turn 73 in 2026, the largest single-year cohort ever
- IRA balances for that group average $383,000, pushing many first RMDs above $14,000
- A skipped $14,000 withdrawal locks in a $3,500 penalty—before interest
Calendar Trick That Saves Four-Figures
The IRS allows two key dates: April 1 of the year after you turn 73 for the first withdrawal, and every Dec. 31 for all later years. Double up in the debut year and you dodge a second penalty layer confirmed in The Motley Fool’s planner library.
Automation Is Now a One-Click Setting
Fidelity, Schwab, Vanguard and most custodians added an “auto-RMD” toggle inside their IRA dashboards in 2025. Enable it and the custodian:
- Calculates the exact dollar amount each January
- Distributes it on your chosen schedule—monthly, quarterly, or lump
- Sends the 1099-R before you file, eliminating guesswork
What If You Already Forgot?
File IRS Form 5329 immediately, withdraw the missed amount, and attach a “reasonable cause” statement. The IRS routinely waives the extra 25% surcharge when the fix occurs within 18 months, leaving only the base penalty outlined in IRA documentation.
Bottom Line for Portfolios
Markets can’t save you from a 50% penalty. A two-minute automation setup—or at minimum a calendar alert before Thanksgiving—insulates every dollar you plan to spend or gift in retirement. Ignore the date and the IRS becomes your largest beneficiary.
Stay ahead of every tax-code tweak and deadline—bookmark onlytrustedinfo.com for the fastest, most definitive retirement finance coverage on the web.
