The RMD Mistakes to Avoid Before December 31st.

The most expensive RMD mistakes to avoid before December 31st come down to timing and coordination, not the withdrawal itself. Pulling your required minimum distribution from the wrong account, missing the charitable-gift window, tripping a Medicare surcharge with a year-end lump sum, converting to a Roth in the wrong order, or rebalancing right after you take the cash: each one can quietly cost you far more than the tax on the distribution alone. The fix is the same for all five. Treat your RMD as one piece of your whole year's tax plan, not a chore you knock out in December.

If you're still fuzzy on the mechanics, start with what required minimum distributions actually are and then come back. The video below walks through the same five mistakes, and the sections after it update every figure for 2026.

▶ Video: youtube.com/watch?v=IFauicpYhlU, “5 Expensive RMD Mistakes That Could Cost You Before December 31st”

Watch: Patrick Shope on the five RMD mistakes that get expensive before December 31st.

Mistake 1: Taking your RMD from the wrong account

Here's the most common one. You get a notice from your 401(k) provider in November, you call them, tell them to send the money, and consider it done. If that's the only account you have, fine. But if you're holding several, you may be leaving money on the table.

Take a composite client we'll call Earl, 73. He has two accounts of roughly equal size: an old 401(k) from a former employer with high fees and a short menu of funds, and a rollover IRA full of low-cost index funds. The rule people miss is this. You can aggregate RMDs across your own IRAs and satisfy the total from any one of them. But each 401(k) has to satisfy its own RMD. You can't cover a 401(k) RMD from an IRA, or the other way around.

So Earl takes the 401(k)'s required amount from the 401(k) itself. Then, if he wants to tidy up, he pulls any extra withdrawals from that same high-fee plan first, because that's the account he'd rather shrink. Same tax bill, cleaner house.

Mistake 2: Missing the December QCD window

This one catches charitable givers off guard every single year. A qualified charitable distribution, or QCD, lets you send money straight from your IRA to a charity. It counts toward your RMD, but it never lands in your taxable income. In 2026 you can give up to $111,000 per person this way, once you're 70½ or older.

That's a genuinely good deal, especially if you'd be taking the standard deduction anyway and getting no tax benefit from your giving. But the mistake is procedural, not strategic. If you wait until mid-December to start a QCD, you're gambling on custodian processing and mailing times. A gift that clears January 2nd doesn't count for the year you meant it to.

Two details matter. A QCD has to come from an IRA, not a 401(k), and it has to be completed by December 31st. So initiate it by late November. Give the paperwork room to breathe.

Mistake 3: Triggering IRMAA when you didn't have to

This is where a single December decision can cost you for two years running. IRMAA, the income-related monthly adjustment amount, is Medicare's way of charging higher-income beneficiaries more for Part B and Part D. In 2026 the first surcharge line sits at $109,000 of modified adjusted gross income for a single filer and $218,000 for a married couple. And it's a cliff, not a ramp. One dollar over the line prices the whole year at the higher tier.

Back to Earl. Say his normal income puts him at $104,000, comfortably under the single line. Then he takes his entire $25,000 RMD in December and his income jumps to $129,000. He's now over $109,000 and into the first IRMAA tier. That adds $81.20 a month to Part B and $14.50 to Part D, about $95.70 a month, or roughly $1,150 for the year, on top of the ordinary tax on the withdrawal.

Now here's the part that stings. Medicare looks back two years. Income you record in 2026 sets the premiums you pay in 2028. So a careless December lump sum today shows up on a bill two years from now, when you've forgotten all about it. The move is to map your total income early in the year, RMD included, and if you're near a threshold, spread the RMD across quarterly installments instead of one December pull. If IRMAA is new to you, here's how the surcharge tiers actually work.

Mistake 4: Converting to a Roth in the wrong order

This one happens to people trying to be smart, which is what makes it frustrating. Plenty of retirees want to do Roth conversions to lower future tax bills. But if you don't account for the RMD first, you can shove part of your conversion into the next bracket up.

Picture it. You figure you have room to convert $40,000 while staying in your current bracket, so you run the conversion in November. Then you remember your $20,000 RMD and take it in December. That $20,000 was already filling the bracket you thought you had free. Now $20,000 of your conversion has spilled into higher-taxed territory.

Think of your income as filling buckets. The RMD takes up space in the lower buckets whether you like it or not. So calculate your total income first, RMD included, then size the conversion to fill only what's left of the bracket you're aiming at. And there's a hard rule to respect: once you're subject to RMDs, you must take the year's RMD before you convert, and RMD dollars themselves can't be converted. Remember too that a conversion is irreversible, so the order isn't something you can undo later.

Mistake 5: Rebalancing right after you take the cash

The last one comes from good intentions. You take your RMD in cash, look at your portfolio, and realize it's drifted out of balance. So you sell some appreciated stock to fix it, and without meaning to, you've created a taxable event you didn't need.

Say you need a $30,000 RMD and you also want to trim your stock allocation. If you take the RMD in cash and then separately sell appreciated shares in your brokerage account, you owe capital gains tax on that appreciation, a second bill stacked on top of the RMD.

There's a cleaner path. Satisfy the RMD by distributing appreciated shares in kind into your taxable account. You still owe ordinary income tax on the fair market value of those shares on the distribution date, because that's your RMD. But you skip realizing a separate capital gain this year. Your new cost basis becomes the value on the distribution date, so you're only taxed once, not twice.

Why these mistakes compound

Here's the thing I tell people in our office: these five don't sit in neat little boxes. They pile on each other. A retiree who takes one big December withdrawal from the wrong account, misses the QCD window, crosses the IRMAA line, and sells stock to rebalance can lose real money in a single year, and part of that (the Medicare piece) follows them into a second year.

The cure is unglamorous. Look at your full-year income in January, not December. Decide where the RMD comes from, whether any of it should go to charity, and how it interacts with any conversion, before you touch a thing. The 2026 numbers sheet lays out the brackets, the IRMAA thresholds, and the RMD ages on one page, so you can see exactly which lines your withdrawal is running toward before you pull the trigger.

An RMD isn't a bill to pay and forget. It's a decision you get to make once a year, and the retirees who plan it in January almost never call me in December in a panic.

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