Annual Retirement Withdrawal Planning Checklist

By Tom, CPA · Updated October 25, 2026

TL;DR: Each January, set a spending budget and an income target. Mid-year, check whether you are on track for ACA and IRMAA limits. In the fourth quarter, harvest gains and size Roth conversions. By December 31, finish RMDs and QCDs. Keep records that will make April easy.

Educational only, not tax, legal, or investment advice. Examples are illustrations, not predictions. Rules and limits change; verify current figures and talk to a qualified professional about your situation.

A once-a-year ritual. Less fun than New Year's, more lucrative. Withdrawal planning is not a single decision; it is a calendar. Income for the year is mostly fixed by December 31, and the levers you can pull, such as conversions, harvesting and charitable distributions, mostly close then too.

This checklist turns the strategy in the withdrawal series into dated tasks.

CPA Warning Label: Most of these moves have a December 31 deadline. A plan made on January 3 is next year's plan.

January: set the budget and buckets

• Spending budget. Estimate cash needed for the year, including taxes and insurance premiums.
• Income target. Pick a MAGI target: the top of the 0% capital gains band, the top of the 12% bracket, an ACA limit, or an IRMAA tier. 2026 0% capital gains thresholds: $49,450 single, $98,900 married filing jointly (IRS).
• Funding sources. Decide which buckets fund spending: cash, taxable sales, traditional IRA withdrawals, Roth contributions or conversions past their five-year mark. Compare conventional vs proportional order.
• Estimated taxes. Calendar 2026 estimated payment dates: April 15, June 15, September 15 and January 15, 2027 (IRS Form 1040-ES), or set up withholding.
• Marketplace check. If on ACA coverage, confirm the income estimate you gave the marketplace matches your plan.

Mid-year: check ACA and IRMAA lines

• Tally income to date: withdrawals, dividends, interest, gains, side income.
• Project the full year, including expected fund distributions.
• ACA: as of Oct 2026, household income above 400% of the federal poverty level means no premium tax credit for 2026, and any excess advance credit must be repaid in full (IRS). Update the marketplace if your estimate changed.
• IRMAA: if you are 63 or older, this year's MAGI sets Medicare premiums two years from now (SSA). Note the nearest tier and stay a cushion below it.
• Social Security: estimate taxable benefits with the taxable benefits calculator.
• Rebalance if needed; selling in an IRA does not create taxable income.

Q4: harvesting and conversions

• October-November: check funds' estimated year-end distributions.
• Tax-loss harvesting: realize losses to offset gains; watch the 30-day wash sale window (IRS Publication 550).
• Gain harvesting: fill the remaining 0% room using the gains harvesting calculator.
• Roth conversions: size them with the Roth conversion calculator; conversions must be completed by December 31 and cannot be undone.
• Decide the order: conversions and gain harvesting compete for the same low-bracket room (see gain harvesting vs Roth conversion).
• Bunch deductions: if itemizing every other year, prepay charitable gifts or fund a donor-advised fund in the bunching year.

December: RMDs and QCDs

• Required minimum distributions: starting at age 73 under current rules, take each year's RMD by December 31 (your first RMD can wait until April 1 of the following year, which doubles up two years in one).
• Qualified charitable distributions: from age 70½, give directly from an IRA to charity, up to $111,000 in 2026 per person (Congressional Research Service). QCDs count toward RMDs and are excluded from income.
• Withholding catch-up: if estimates fell short, take an IRA distribution with withholding; it is treated as paid evenly through the year (IRS Publication 505).
• HSA and IRA contributions: confirm amounts; IRA and HSA contributions for the year can be made until the filing deadline.
• Final income check before the year closes.

Year-round: the health insurance thread

Health coverage ties the calendar together for early retirees. Open enrollment for marketplace plans usually runs from November 1 into January, so the coverage decision and the income estimate for next year happen during the same weeks you are finishing this year's conversions. Before 65, the premium tax credit depends on this year's income. At 65, Medicare begins, and IRMAA uses income from two years earlier, so the planning window shifts: income at 63 sets premiums at 65 (SSA). If a life-changing event such as retirement reduced your income, you can ask SSA to use more recent income with Form SSA-44.

Write both lines on your one-page plan: the ACA limit for this year, and the IRMAA tier that this year's income will set for the year after next.

Illustration: one year on the calendar

Illustration. Assumptions: married couple, ages 58 and 56, 2026, spending $70,000 a year, ACA coverage. January: target MAGI under the 400% FPL limit for a household of two ($84,600 for 2026 coverage, per CMS) with a buffer, so $80,000. Funding: $35,000 from taxable sales (with $20,000 of gain) and $45,000 from IRA withdrawals and conversions. June: dividends running $1,000 higher than expected; they trim a planned conversion. November: a fund announces a $2,000 distribution; they reduce the December conversion again. December 31: MAGI ends at about $79,500. Their ACA credit survives, and federal tax is modest because ordinary taxable income stays in the 10% and 12% brackets and gains fit in the 0% band.

Inherited and special accounts

• Inherited IRAs: many beneficiaries must empty the account within 10 years, and some must also take annual distributions. Put those amounts in the January income estimate.
• HSAs: reimbursements for qualified medical expenses are tax-free and do not raise MAGI, which makes an HSA a useful spending source in a tight ACA year.
• Roth IRAs: contributions can be withdrawn at any time; converted amounts within five years may face the 10% additional tax if you are under 59½ (IRS Publication 590-B).
• Cash buffer: spending from cash adds no income at all, which is why a one- or two-year cash reserve is a planning tool, not just a comfort blanket.

The one-page plan template

1. Spending budget for the year.
2. Income target and the reason (bracket top, 0% gains limit, ACA limit, IRMAA tier).
3. Planned sources, by bucket and amount.
4. Planned conversion and harvest amounts, to be finalized in Q4.
5. Estimated payment schedule or withholding plan.
6. Year-end result and notes for next year.

Keep it next to the tax return. Next January, start by reading last year's notes.

Records to keep

• Year-end statements for every account.
• Conversion confirmations and a ledger of conversion years (for the five-year rules).
• Basis records for taxable lots, including harvested gains.
• Charity receipts and QCD confirmations.
• Estimated payment confirmations.
• Marketplace Form 1095-A and any income updates.
• A one-page summary: the income target, the result and what to change next year.

Frugal Fran's one-pager fits on an index card. Lavish Larry's is a shoebox he describes as "a system."

Common slip-ups

• Forgetting a year-end fund distribution that pushes MAGI over a line.
• Converting on December 31 and missing the cut-off.
• Missing an inherited IRA's annual distribution.
• Not updating the marketplace when income changes.
• Ignoring state tax in the income target.