Stuck Taking an RMD in 2026? 4 Ways to Make the Most Of It.

If you have your retirement savings in a traditional account, as opposed to a Roth, you should know that you can't leave your money sitting there forever. At either age 73 or 75, depending on your year of birth, the IRS is going to start mandating that you take yearly withdrawals known as required minimum distributions, or RMDs.

RMDs can be a pain if you don't have an obvious use for the money, since they count as taxable income. But rather than let your 2026 RMD be a source of aggravation, it pays to find a way to put it to good use. Here are some options to consider.

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1. Boost your emergency fund

Emergency savings aren't just a necessity for working folks. You never know when an unplanned bill, like a home repair, might pop up out of the blue.

It's always a good idea to have a cash emergency fund in retirement, because tapping investments for money at the wrong time could mean taking losses in your portfolio. So if you don't need your upcoming RMD for something specific, you could always put it into a savings account for extra protection.

2. Pay off lingering debt

You may have a mortgage you carried with you into retirement, or a car loan you haven't quite gotten rid of. You may want to consider using your RMD to tackle that debt. If so, a good idea is to prioritize your debt in order of highest interest rate to lowest.

3. Treat yourself to something you otherwise wouldn't buy

Some people have a hard time splurging on themselves. If that sounds like you, your RMD gives you an opportunity to purchase something you might otherwise feel too guilty to buy. That "something" could be a new couch that's more comfortable, a nice vacation, or a certain piece of jewelry you've always wanted to own.

4. Fund a college savings account for your grandkids

Saving for college can be a tall order these days given how expensive life has gotten. If you have grandkids, consider using your RMD to make contributions to a college savings account. Not only is that a nice thing to do for them, but it could help take some of the pressure off of your own kids who may be struggling to save for education on top of their other bills.

RMDs can be a pain when you'd rather keep the money in your retirement plan. But if you have no choice but to take them, you might as well use that money to improve your finances, bring yourself joy, or help your grown kids and grandkids.

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