Families headed by someone 75 or older had a median net worth of $504,900 in 2025, up 37% from 2022 in real terms. That is now the highest of any age group. Households 65 to 74 slipped 4% over the same stretch, to $431,300.
The figures come from the Federal Reserve’s Survey of Consumer Finances, and the Fed traced the jump for the oldest group mainly to one asset: retirement accounts.
That growth comes with a calendar. Most money in traditional IRAs and 401(k)s has never been taxed, and the IRS generally requires owners to start taking distributions at 73. A bigger balance means a bigger required withdrawal, and a bigger ripple through the rest of a tax return.
Deadlines to watch
The IRS calculates each required minimum distribution, or RMD, by dividing the account’s value at the end of the prior year by an IRS life expectancy factor. An account that grew in 2025 produces a larger 2026 withdrawal, whether or not the owner needs the cash.
The deadline for 2026 withdrawals is Dec. 31. People who turned 73 in 2026 can wait until April 1, 2027, for their first one, but that means taking two RMDs in 2027 and paying tax on both in the same year.
Missing one is expensive. The amount not withdrawn can face a 25% excise tax, reduced to 10% if the shortfall is corrected within two years.
IRA owners may calculate each account’s RMD and take the combined total from any one IRA. 401(k) and 457(b) plans do not work that way; each plan’s RMD must come out of that plan, and confusing the two is a costly 401(k) mistake.
The withdrawal can raise more than your income tax
RMDs count as ordinary income, and that income can make more of your Social Security benefits taxable. In some cases, an extra withdrawal is taxed at an effective rate far above the retiree’s bracket.
Medicare premiums are also tied to income. For 2026, people with modified adjusted gross income above $109,000, or $218,000 for joint filers, pay more than the standard $202.90 a month for Part B.
Social Security generally sets those surcharges from your income two years earlier, so a large withdrawal in 2026 could raise Medicare premiums in 2028.
Giving it away can satisfy the requirement
IRA owners 70½ or older can send money directly from the account to a charity through a qualified charitable distribution. The gift counts toward the RMD but stays out of taxable income, and the 2026 limit is $111,000 per person.
For anyone who already gives to a church or charity, that route can beat taking the withdrawal, paying tax on it and then writing a check. The money has to go straight from the IRA custodian to the charity. Money in a 401(k) does not qualify unless it is first rolled into an IRA.
When the moving parts multiply
RMDs, taxes on Social Security benefits, Medicare surcharges and charitable giving all pull on the same number, and the order of withdrawals can change the result. If you have $100,000 or more invested and want help sequencing it all, SmartAsset matches you with up to three fiduciary advisors, who are legally required to put your interests first.
The service is free. Expect a questionnaire of about 10 minutes that asks for a phone number near the end, and you decide whether and when to respond to any advisor. SmartAsset handles the matching, not the advice, and Money Talks News may earn a referral fee. Get matched with a fiduciary advisor.
Money that outlives the owner
Retirement accounts that keep growing past 75 often pass to heirs, and the tax rules follow the money. Most adult children who inherit an IRA must empty it within 10 years, and many owe withdrawals along the way.
Checking the beneficiary form on every account costs nothing, and that form usually controls who gets the money regardless of what a will says. For everything else, the Money Talks News estate planning page can help you set up a will or trust.
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