Year-End Tax Moves for Retirees (2026 Edition)

The last few weeks of December are the most consequential tax planning window of the year for retirees. Unlike workers whose income is largely fixed by their salary, retirees have extraordinary control over the timing and character of their income — and the decisions you make (or fail to make) before December 31 can ripple across your tax bill, Medicare premiums, and healthcare subsidies for years to come.

Here are ten actionable moves to evaluate before the clock runs out on 2026. Each one is backed by current IRS data and calibrated to the permanent TCJA brackets established by the One Big Beautiful Bill Act.

1. Roth Conversions: Fill Your Bracket

The single most impactful year-end move for most retirees is a Roth conversion sized to fill your current tax bracket. With TCJA rates now permanent, the 2026 married filing jointly brackets are: 10% up to $24,800, 12% to $100,800, 22% to $211,400, and 24% to $403,550.[1]

Calculate your taxable income from all sources (Social Security, pensions, RMDs, other withdrawals), subtract your standard deduction ($32,200 MFJ, plus the new senior deduction if eligible), and convert enough from your traditional IRA to fill up to the top of your desired bracket. For many retirees, the 22% or 24% bracket is the sweet spot.

Deadline: Roth conversions must settle by December 31. Initiate by mid-December to avoid processing delays.

2. Tax-Gain Harvesting at 0%

If your taxable income (after deductions) is below $98,900 (MFJ) or $49,450 (single), long-term capital gains in that space are taxed at 0%.[5]This is free money — you can sell appreciated stock, mutual funds, or ETFs, pay zero tax on the gains, and immediately repurchase the same asset to reset your cost basis higher.

There is no wash-sale rule for gains (only for losses). The key constraint is ensuring the realized gains do not push your income above the 0% threshold, into the ACA cliff zone, or into an IRMAA tier.

3. Tax-Loss Harvesting to Offset Gains

Review your taxable brokerage account for positions trading below your cost basis. Selling them before year-end generates capital losses that can offset capital gains dollar-for-dollar, plus up to $3,000 of ordinary income per year. Excess losses carry forward indefinitely.[5]

Wash-sale warning:You cannot repurchase a “substantially identical” security within 30 days before or after the sale. Replace the sold position with a similar (but not identical) fund to maintain market exposure during the 30-day window.

For retirees doing Roth conversions, harvested losses are especially valuable — they can offset the ordinary income generated by the conversion (via the $3,000 annual deduction or by offsetting gains elsewhere in the portfolio that would otherwise increase your tax bill).

4. Qualified Charitable Distributions (QCDs)

If you are age 70-1/2 or older, you can make a Qualified Charitable Distribution of up to $111,000 per person directly from your IRA to a qualifying charity for 2026.[2]The QCD is excluded from gross income entirely — it does not appear in your AGI.

This makes QCDs superior to the standard charitable deduction in almost every way: they reduce AGI (which affects Social Security taxation, IRMAA, ACA subsidies, and NIIT), they satisfy part or all of your RMD, they bypass the new 0.5% AGI charitable deduction floor, and they benefit taxpayers who take the standard deduction (since no itemizing is required).

Action: Contact your IRA custodian to initiate QCDs before mid-December. The check must be payable to the charity (not to you) and must clear by December 31.

5. Bunch Charitable Deductions

If you prefer to itemize charitable contributions rather than use QCDs (perhaps because you are under 70-1/2 or want to donate appreciated securities), consider bunching— concentrating two or three years of charitable giving into a single tax year.

With the 2026 standard deduction at $32,200 (MFJ) plus the senior deduction, you need significant itemized deductions to exceed the standard deduction threshold. Bunching charitable gifts into one year (often through a donor-advised fund) lets you itemize in the giving year and take the standard deduction in off years. Remember to account for the new 0.5% AGI floor on charitable deductions.

6. Take Your RMD by December 31

If you are age 73 or older (or turned 73 in 2026), your Required Minimum Distribution must be taken by December 31, 2026.[2]The only exception is for your first RMD year, where you can defer until April 1 of the following year — but this means taking two RMDs in one year, which often pushes you into a higher bracket.

The penalty for missing an RMD is 25% of the amount not distributed (reduced from the prior 50% by SECURE 2.0), and drops to 10% if corrected within two years. Still, there is no reason to risk it. Set a calendar reminder for early December.

Strategy: If your RMD exceeds your spending needs, direct the excess to a QCD (if eligible), reinvest in a Roth IRA (if you have earned income), or invest in a taxable brokerage account for future tax-gain harvesting.

7. HSA Contributions Before April 15 Deadline

If you are enrolled in an HSA-eligible high-deductible health plan, you can contribute to a Health Savings Account for the 2026 tax year until April 15, 2027.[4] For 2026, the limits are $4,400 (self-only) or $8,750 (family), plus a $1,000 catch-up if you are 55 or older.

HSA contributions reduce your MAGI — making them a powerful tool for staying below the ACA cliff, IRMAA tiers, or NIIT thresholds. The funds grow tax-free and can be withdrawn tax-free for qualified medical expenses at any age. After 65, withdrawals for non-medical expenses are taxed as ordinary income but face no penalty (similar to a traditional IRA).

Note: You cannot contribute to an HSA once you enroll in Medicare. If you turn 65 mid-year, your contribution limit is prorated. Plan contributions accordingly.

8. Review the IRMAA Lookback: Your Income Determines Future Premiums

Medicare's IRMAA surcharges use a two-year lookback. Your 2026 MAGI determines your future Medicare Part B and Part D premiums.[3]Every income decision you make this year — Roth conversions, capital gains realizations, RMD amounts — directly affects what you pay for Medicare two years later.

For 2026, the IRMAA thresholds are $109,000 (single) and $218,000 (MFJ) for the first surcharge tier.[3] Exceeding a tier threshold by even $1 triggers the full surcharge for the entire year.

Action: Before making any year-end Roth conversion or asset sale, calculate your projected 2026 MAGI and compare it to the IRMAA tier thresholds. If you are close to a tier boundary, it may be worth deferring some income to January 2027.

9. Max Out Catch-Up Contributions

If you are still working at age 50 or older, you can contribute up to $32,500to your 401(k) in 2026 ($24,500 regular + $8,000 catch-up). If you are ages 60–63, the super catch-up raises the total to $35,750.[1]

For IRA contributions, the 2026 limit is $7,500 plus a $1,100catch-up for those 50+, for a total of $8,600. Traditional IRA contributions may be deductible depending on your income and plan coverage. IRA contributions can be made until April 15, 2027, but 401(k) contributions must come from payroll — so adjust your deferral percentage now to maximize contributions through your remaining 2026 paychecks.

10. Harvest Losses to Offset Roth Conversion Tax

This is the advanced move that ties several strategies together. If you are doing a Roth conversion, the converted amount is taxable as ordinary income. But if you also have capital losses in your taxable portfolio, you can harvest those losses to offset up to $3,000of the conversion's ordinary income tax, or use them to offset capital gains elsewhere that would otherwise add to your tax burden.[5]

The ideal sequence: (1) Harvest losses from your taxable account first. (2) Calculate your remaining room in the target bracket after losses. (3) Execute the Roth conversion to fill that remaining space. This approach lets you convert more to Roth while keeping your net tax bill lower.

Putting It All Together: The Year-End Checklist

The order matters. Here is a recommended sequence for year-end tax planning:

1. Calculate your year-to-date MAGI from all sources (Social Security, pensions, dividends, RMDs, etc.)
2. Identify your remaining room in the target tax bracket, below the ACA cliff, and below the nearest IRMAA tier
3. Take your full RMD if not yet completed
4. Execute QCDs to satisfy charitable goals and reduce AGI
5. Harvest capital losses from the taxable portfolio to create an offset buffer
6. Execute tax-gain harvesting in the 0% capital gains bracket (if applicable)
7. Perform a Roth conversion to fill the remaining bracket space
8. Verify that the combined effect of all moves keeps you below the ACA cliff and IRMAA tier thresholds
9. Make HSA contributions if eligible (can complete by April 15, but good to plan now)
10. Adjust 401(k) catch-up deferrals for remaining paychecks if still working

The key insight is that these moves are interdependent. A Roth conversion changes your bracket, which changes your capital gains rate, which changes your IRMAA tier, which changes your ACA subsidy. Model the full picture before pulling any trigger — or use the calculators on this site to see how the pieces fit together.