RMD Rules 2026 – What Changed and What Texas Retirees Should Do About It

You spent decades building your retirement savings – and now the IRS wants its share. If you’re turning 73 this year, or already taking required minimum distributions from your IRA or 401(k), the 2026 RMD rules come with a few changes worth paying attention to. Some of them work in your favor. Others could cost you real money if you miss the details.

Here’s what actually changed for 2026. The RMD starting age remains 73 under the SECURE 2.0 Act for anyone born between 1951 and 1959 – that part hasn’t moved. But the qualified charitable distribution (QCD) limit has increased to $111,000 per individual (up from $108,000 in 2025), and the one-time QCD election for split-interest entities like charitable remainder trusts rose to $55,000, per IRS Notice 2025-67. The penalty for missing an RMD sits at 25% of the amount you failed to withdraw, reduced from the old 50% penalty. And if you catch the mistake within two years, that penalty drops further to just 10%.

For Texas residents, there’s an additional layer most national guides overlook. Texas has no state income tax on retirement distributions – IRA withdrawals, 401(k) distributions, pension payments, and Social Security all avoid state taxation. That means every RMD strategy becomes slightly more favorable when you’re running the numbers from Houston, Dallas, Austin, or San Antonio.

Let me walk you through the specific rules, calculations, and strategies that matter most heading into this year.

Who Needs to Take an RMD in 2026?

The SECURE 2.0 Act created a two-step increase for RMD starting ages. For 2026, the rules break down based on your birth year.

• Born 1950 or earlier – You’ve been taking RMDs already. Your annual deadline is December 31, 2026.
• Born in 1951 – You turned 73 in 2024 and should already be in the RMD cycle. December 31 deadline applies.
• Born in 1952 – You turned 73 in 2025. If you delayed your first RMD, it’s due by April 1, 2026. Your second RMD is also due by December 31, 2026.
• Born in 1953 – You turn 73 in 2026. This is your first RMD year. You can take it by December 31, 2026, or delay until April 1, 2027 – but that delay creates a potential tax problem we’ll cover below.
• Born 1960 or later – Your RMD age jumps to 75, starting in 2033. You have more time, but that doesn’t mean you shouldn’t plan now.

One important exception – if you’re still working past age 73 and have a 401(k) with your current employer, you may delay RMDs from that specific plan until retirement. This exception does not apply if you own 5% or more of the business sponsoring the plan. It also does not apply to IRAs or old 401(k) plans from previous employers.

Roth 401(k) plans are now exempt from RMDs during the original account holder’s lifetime, effective 2024 under SECURE 2.0. Roth IRAs were always exempt.

How Your 2026 RMD Is Calculated

The math is simple. Take your total account balance as of December 31, 2025, and divide by the IRS life expectancy factor for your age in 2026. The IRS publishes these in the Uniform Lifetime Table (unchanged since 2022).

If your spouse is both your sole beneficiary and more than 10 years younger, the IRS allows you to use the Joint and Last Survivor Table instead – producing a smaller RMD.

For oil and gas professionals with multiple retirement accounts – you calculate your RMD separately for each IRA but can take the total from any one or combination of IRAs. This flexibility does not apply to 401(k) plans, where each plan’s RMD must come from that specific account.

The First RMD Timing Decision – 2026 or April 2027?

If you’re turning 73 in 2026, the IRS gives you a choice. You can take your first RMD by December 31, 2026, or you can delay it until April 1, 2027. On the surface, delaying sounds attractive – more time for your money to grow tax-deferred. But the math often tells a different story.

Delaying means you’ll need to take two RMDs in 2027 – your first-year distribution (due by April 1) and your regular 2027 RMD (due by December 31). That double distribution could push you into a higher federal tax bracket, increase Medicare Part B and Part D premiums through IRMAA surcharges, and make more of your Social Security benefits taxable.

Here’s a simplified decision framework.

For oil and gas professionals who received severance packages or experienced layoffs – your income picture may look very different year to year. Running projections for both scenarios with your financial advisor could save thousands in taxes.

QCD Strategies for 2026 – Using Charitable Giving to Reduce Your Tax Bill

If you’re 70½ or older and charitably inclined, qualified charitable distributions remain one of the most effective tax strategies for retirees. A QCD transfers funds directly from your IRA to a qualified 501(c)(3) charity. The amount counts toward your RMD but is excluded from taxable income entirely.

For 2026, the limits are as follows (per IRS Notice 2025-67).

• Annual QCD limit – $111,000 per individual, or $222,000 for married couples filing jointly (each spouse from their own IRA)
• One-time split-interest election – Up to $55,000 to a charitable remainder unitrust (CRUT), charitable remainder annuity trust (CRAT), or charitable gift annuity (CGA). This is a lifetime election.
• Minimum age – 70½ (you don’t need to wait until RMD age to start using QCDs)
• Eligible accounts – Traditional IRAs, Inherited IRAs, and inactive SEP or SIMPLE IRAs (not currently receiving employer contributions)
• Not eligible – 401(k) plans, 403(b) plans, donor-advised funds, private foundations

Here’s where strategy gets interesting for Texas retirees. Since Texas doesn’t tax distributions at the state level, your QCD benefit is focused entirely on reducing federal taxable income. The QCD strategy is specifically about managing your federal bracket, IRMAA thresholds, and Social Security taxation.

Should you use a QCD? Here’s a quick way to think through it.

• You already donate regularly – A QCD may be more tax-efficient than taking the RMD as income and making a separate donation, especially with 2026 changes to charitable deduction rules under the One Big Beautiful Bill Act.
• You don’t itemize deductions – QCDs give you a tax benefit for charitable giving even if you take the standard deduction.
• Your RMD pushes you into a higher bracket – Directing part or all of your RMD as a QCD keeps that income off your return entirely.
• You want to reduce IRMAA surcharges – Medicare premiums are based on income from two years prior. A QCD in 2026 may help reduce 2028 Medicare costs.

The key requirement – funds must transfer directly from your IRA custodian to the charity. Withdrawing money first and then donating it does not qualify.

Coordinating RMDs with Oil and Gas Pensions and Benefits

Many of our clients at Saxon Financial work or worked in the energy sector – companies like ExxonMobil, Chevron, ConocoPhillips, and Phillips 66. These positions often come with a combination of pension benefits, 401(k) plans, deferred compensation, and stock positions. When RMDs begin, all of these income streams need to be coordinated.

• Pension plus IRA distributions – Your pension income is already taxable at the federal level. Adding RMDs on top can push combined income into the 24% or 32% federal bracket. Planning the timing and size of withdrawals matters.
• Multiple 401(k) accounts – If you changed employers during industry consolidation waves, you may have plans scattered across custodians. Each requires its own RMD. Rolling old 401(k) plans into a single IRA before RMDs begin simplifies the process.
• Deferred compensation overlap – Some energy companies structure deferred comp payouts starting at retirement or age 65. If those payments overlap with RMDs at 73, the income spike can be substantial. Roth conversions in the gap years between retirement and age 73 may help.

The Texas advantage shows up clearly here. A retiree in California receiving a $40,000 pension plus a $30,000 RMD would owe state income tax on the full $70,000. A Texas retiree with identical income pays zero state tax on those distributions.

RMD Penalty Rules – What Happens If You Miss the Deadline

The penalty structure under SECURE 2.0 is more forgiving than the old rules, but still significant.

• Standard penalty – 25% of the RMD amount you failed to withdraw (reduced from the previous 50%)
• Reduced penalty – 10% if you correct the shortfall within two years and file an amended return
• Reporting – File IRS Form 5329 to report the missed distribution and calculate the excise tax

If your required distribution was $40,000 and you forgot to take it, the 25% penalty costs you $10,000. Correcting within two years drops that to $4,000. Set a reminder for October or November to verify your RMDs are on track – waiting until late December creates risk when custodian processing times slow down.

Frequently Asked Questions About RMD Rules in 2026

Planning Your 2026 RMD Strategy

RMDs are not just a compliance exercise – they’re a meaningful part of your retirement income and tax strategy. The decisions you make about timing, QCD usage, and account coordination can affect your tax bracket, Medicare premiums, and estate planning for years to come.

If you’re approaching 73 or trying to figure out how your oil and gas benefits fit into the picture, our advisors at Saxon Financial Group work with Texas retirees and energy sector professionals on exactly these questions. Learn more about our retirement planning approach, or schedule a conversation with our team to review your RMD situation before year-end deadlines arrive.

This article is provided for educational purposes and does not constitute tax, legal, or investment advice. Consult your tax professional or financial advisor for guidance specific to your situation. Saxon Financial Group is an SEC-registered investment advisor.

Disclosures: 

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.