If you’re retired or close to retirement, your income likely comes from a mix of Social Security, pensions, required minimum distributions (RMDs), and IRA withdrawals. Even small changes in federal tax rules can have an outsized effect on how much of that income you actually keep.
For tax year 2026, the IRS will roll out inflation-adjusted tax brackets, higher standard deductions, and updated thresholds that directly affect retirees. These changes are designed to prevent “bracket creep” caused by inflation and cost-of-living adjustments (COLAs), but they also create new planning opportunities—and risks—if you don’t prepare.
Here’s what the 2026 tax bracket changes mean for retirees, how they interact with Social Security and RMDs, and what you can do now to lower your future tax bill.
2026 Federal Tax Brackets: What’s Changing
For 2026, the federal income tax system keeps the same seven marginal tax rates:
- 10%
- 12%
- 22%
- 24%
- 32%
- 35%
- 37%
What changes are the income thresholds for each bracket. These thresholds increase by roughly 2–3% to account for inflation.
Key 2025 vs 2026 Comparison
| Category | 2025 | 2026 (Est.) |
| Standard Deduction (Single) | $15,750 | $16,100 |
| Standard Deduction (Joint) | $31,500 | $32,200 |
| Extra 65+ Deduction | $6,000 | $6,000 |
| Top Bracket Single | $626,350 | $640,600 |
| Top Bracket Joint | $751,600 | $768,700 |
| Estate Exclusion | $13.99M | ~$15M |
| RMD Start Age | 73 | 73 |
| Official Website | https://www.irs.gov/ | |
Estimated 2026 Bracket Highlights (Taxable Income)
Single filers
- 22% bracket begins around $50,400
- 24% bracket begins around $105,700
- Top 37% bracket begins around $640,600
Married filing jointly
- 22% bracket begins around $100,800
- 24% bracket begins around $211,400
- Top 37% bracket begins around $768,700
These wider brackets help ensure that Social Security COLAs or modest pension increases don’t automatically push you into a higher tax rate. Remember, only the income above a threshold is taxed at the higher rate—not your entire income.
Standard Deduction Increases: A Big Win for Retirees
The standard deduction rises again for 2026, which is especially valuable for retirees who no longer itemize.
Estimated 2026 Standard Deduction
- Single: $16,100
- Married filing jointly: $32,200
Extra Deduction for Age 65+
If you’re 65 or older, you can add an extra $6,000 per person (temporary senior enhancement through 2028).
That means:
- A single retiree 65+ could deduct about $22,100
- A married couple both 65+ could deduct about $44,200
This larger deduction can shield more of your Social Security and RMD income from federal tax, reducing your overall taxable income even if your gross income stays the same.
How RMDs Fit Into the 2026 Tax Picture
Under current rules:
- RMDs start at age 73 for those born between 1951 and 1959
- RMDs are taxed as ordinary income
Example
If you have $500,000 in a traditional IRA at the end of 2025, your 2026 RMD might be roughly:
- $500,000 ÷ 24.7 ≈ $20,200
That $20,200 is added to your taxable income and can push you into a higher tax bracket if you’re not careful.
You can delay your first RMD until April 1 of the following year, but doing so means two RMDs in one tax year, which often increases taxes and can trigger higher Medicare premiums.
Social Security Taxes and 2026 Brackets
Social Security benefits are taxed based on provisional income, not your tax bracket alone.
- 0% taxable if income is below thresholds
- Up to 50% taxable above $25,000 (single) / $32,000 (joint)
- Up to 85% taxable above $34,000 (single) / $44,000 (joint)
The wider 2026 tax brackets and higher standard deduction help offset COLA increases, meaning many retirees won’t see a large jump in Social Security taxation—even if benefits rise.
Still, adding RMDs or large IRA withdrawals on top of Social Security can quickly increase the taxable portion.
Medicare IRMAA: The Hidden Tax Retirees Forget
Your Medicare Part B and Part D premiums are tied to your MAGI from two years prior. These surcharges are known as IRMAA.
Higher tax brackets in 2026 slightly reduce the chance of crossing IRMAA thresholds, but:
- Large RMDs
- Roth conversions
- Capital gains
can still push you over the line.
Even one dollar over an IRMAA threshold can increase premiums by hundreds or thousands per year.
Smart Tax Strategies for Retirees in 2026
1. Roth Conversions (Strategically)
Converting part of your IRA to a Roth during lower-income years can:
- Fill up the 12% or 22% bracket
- Reduce future RMDs
- Lower Medicare IRMAA risk later
2. Qualified Charitable Distributions (QCDs)
If you’re 70½ or older, you can:
- Send up to $105,000 directly from your IRA to charity
- Count it toward your RMD
- Exclude it from taxable income entirely
3. Capital Gains Planning
For 2026:
- 0% long-term capital gains up to about $49,450 (single)
- 15% rate applies well into six figures
Careful timing of asset sales can keep gains tax-free or low-tax.
Estate and Gift Tax Changes in 2026
The federal estate tax exclusion rises to about $15 million per person (indexed).
Other key points:
- Annual gift exclusion: $19,000 per recipient
- Non-citizen spouse gift limit: about $194,000
- Most retirees won’t owe estate tax, but beneficiary and trust planning still matters
Steps Retirees Should Take Now
- Project your 2026 income (Social Security, RMDs, pensions)
- Run tax simulations with and without Roth conversions
- Estimate IRMAA risk before large withdrawals
- Update withholding using Form W-4R
- Review plans with a CPA or financial planner before year-end 2025
Early planning is the difference between using these changes to your advantage—or paying more than necessary.
The 2026 tax bracket changes are mostly positive for retirees: wider brackets, higher deductions, and better inflation protection. But RMDs, Social Security taxation, and Medicare premiums can still create tax surprises if you don’t plan ahead.
By understanding how these rules work together—and using tools like Roth conversions and QCDs—you can protect your retirement income and keep more of your money working for you.
FAQ’s
1. Will retirees pay less tax in 2026?
Many retirees will pay the same or slightly less tax due to higher deductions and wider brackets, but those with large RMDs or conversions could still see higher bills without planning.
2. Do 2026 tax bracket changes affect Social Security taxes?
Indirectly, yes. Higher deductions and wider brackets can reduce how much of your Social Security becomes taxable, especially when combined with careful withdrawal planning.
3. Should retirees do Roth conversions before 2026?
Often yes—especially if you’re currently in a lower tax bracket than you expect to be after RMDs begin. The exact amount depends on your income, Medicare premiums, and long-term plans.
