Everything you need to know about managing your IRAs in retirement — from Roth conversions to Required Minimum Distributions and the SECURE 2.0 rule changes.
Both IRA types offer tax advantages, but they work differently. The right choice depends on your current tax rate, expected future tax rate, and whether you anticipate needing the money during retirement.
| Feature | Traditional IRA | Roth IRA |
|---|---|---|
| Tax on contributions | Deductible (if eligible) | After-tax — no deduction |
| Tax on growth | Tax-deferred | Tax-free |
| Tax on withdrawals | Taxed as ordinary income | Tax-free (if qualified) |
| Required Minimum Distributions | Yes — starting at age 73 | No RMDs during owner's lifetime |
| Early withdrawal penalty | 10% before age 59½ (exceptions apply) | 10% on earnings before 59½; contributions always penalty-free |
| Income limits | Deductibility limited by income if covered by workplace plan | Contribution limits phase out at higher incomes |
| Best for | Expect lower tax rate in retirement | Expect same or higher tax rate in retirement |
The honest answer for most retirees: If you already have a large Traditional IRA, your tax situation is largely set. The strategic question now is whether to do Roth conversions — moving money over gradually and paying tax now at known rates before RMDs force larger taxable withdrawals starting at 73.
If you're still contributing to an IRA — even in early retirement with part-time income — these are the 2026 limits.
SECURE 2.0 eliminated the age 70½ cap on Traditional IRA contributions. As long as you have earned income — including part-time work in retirement — you can contribute to either a Traditional or Roth IRA at any age.
When you leave a job or retire, you have options for what to do with your 401(k) or other employer plan. Understanding the difference between a rollover and a transfer prevents costly mistakes.
Money moves directly from your old 401(k) custodian to your IRA custodian. No taxes withheld, no 60-day deadline, no risk of missing the window. This is the cleanest method and should be your default approach.
The check is sent to you personally. Your employer is required to withhold 20% for taxes. You must deposit the full original amount (including the withheld 20% from your own funds) into your IRA within 60 days — or the withheld amount is treated as a taxable distribution. You get the 20% back at tax time, but missing the 60-day window is an expensive mistake.
Once you reach age 73, the IRS requires you to withdraw a minimum amount from your Traditional IRAs and most other tax-deferred retirement accounts each year. This is the government recouping taxes on money that's been growing tax-deferred for decades.
Formula: Your IRA balance on December 31 of the prior year ÷ your IRS Life Expectancy Factor for your age
Example: $350,000 balance ÷ 26.5 (age 73 factor) = $13,208 RMD for the year (~$1,101/month if taken monthly)
You can always withdraw more than your RMD. You just cannot withdraw less without penalty.
If you have multiple Traditional IRAs, calculate the RMD for each account separately, but you can satisfy the total from any one IRA or combination. However, 401(k) RMDs must be taken from each 401(k) separately — you cannot aggregate across plans or pull from an IRA to satisfy a 401(k) RMD.
These are the IRS Uniform Lifetime Table factors used by most retirees. Use your age in the year the distribution is taken, and your account balance as of December 31 of the prior year.
| Age | Life Expectancy Factor | % of Account Withdrawn |
|---|---|---|
| 73 | 26.5 | 3.77% |
| 74 | 25.5 | 3.92% |
| 75 | 24.6 | 4.07% |
| 76 | 23.7 | 4.22% |
| 77 | 22.9 | 4.37% |
| 78 | 22.0 | 4.55% |
| 79 | 21.1 | 4.74% |
| 80 | 20.2 | 4.95% |
| 82 | 18.5 | 5.41% |
| 85 | 16.0 | 6.25% |
| 90 | 12.2 | 8.20% |
Use the IRS RMD worksheet or the official tables in IRS Publication 590-B for the complete factor table and special rules for spouses more than 10 years younger.
A Roth conversion moves money from a Traditional IRA to a Roth IRA. You pay ordinary income tax on the amount converted in that year, but all future growth and withdrawals from the Roth are tax-free.
For many retirees, the years between retirement and the start of RMDs at 73 are the lowest-income years of their life. Social Security may not have started yet (or may be partially delayed). This creates a window to convert Traditional IRA funds to Roth at a lower tax cost. Even partial conversions — filling up your current tax bracket each year — can meaningfully reduce your future RMD burden.
IRMAA caution: Roth conversions increase your MAGI, which can trigger or increase Medicare IRMAA surcharges two years later. If you're near an IRMAA threshold, model the impact carefully before converting a large amount in a single year. Sometimes spreading the conversion over multiple years is better than one large conversion.
If you're 70½ or older and charitably inclined, a QCD is one of the most tax-efficient moves available to you. It allows you to send money directly from your IRA to a qualified charity — and that amount counts toward your RMD but is never included in your taxable income.
Most retirees take the standard deduction and get no benefit from itemizing charitable gifts. A QCD bypasses this — the excluded income never appears on your return at all, which also means it won't increase your MAGI, trigger IRMAA surcharges, or affect the taxation of your Social Security benefits. It's a direct tax reduction, not just a deduction.
The SECURE 2.0 Act (signed December 2022) made significant changes to retirement account rules. Here are the ones most relevant to retirees and near-retirees in 2026.
If you've inherited an IRA — or are planning your estate — the rules changed significantly after the original SECURE Act (2019). Most non-spouse beneficiaries now face a 10-year rule instead of lifetime "stretch" distributions.
Non-spouse beneficiaries who inherited an IRA from someone who died in 2020 or later generally must empty the account within 10 years of the original owner's death. There are no mandatory annual distributions during the 10 years — but the full balance must be out by December 31 of year 10.
Estate planning note: The 10-year rule can create significant tax bunching for your heirs if they're in their peak earning years. A properly drafted trust, Roth conversion before death, or naming a younger beneficiary strategically can help. This is worth discussing with an estate planning attorney.