For many retirees or those approaching retirement, tax planning may be something they consider when they get there. But certain tax moves in delayed retirement can sometimes lock in higher lifetime taxes, limit future options and create costly surprises in future years. Financial advisors say some of the biggest regrets come from waiting too long to take action.
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Here are seven actions retirees are waiting until 2026 to take.
One of the most common and costly mistakes retirees make is putting off a coordinated plan to withdraw money from different accounts, said Stephanie Temporiti, a wealth advisor at Hightower in St. Louis. Without a clear withdrawal strategy, retirees often incur unnecessary taxes, miss out on charitable efficiencies, and create surges in income that spill over into future tax years. Retirees often regret it when they realize it is too late to reverse these early decisions.
She recommends working with a tax professional and asking key questions, such as:
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How much do you need per year?
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What other sources of income do you have?
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How will these sources of income be taxed?
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Is there any portion of your spending that should come from one type of account rather than another, such as a charity?
Read more: What the 2026 Advanced Tax Cuts Mean for Social Security and Retirement Plans
A Roth conversion is one of the most time-sensitive tax moves in retirement, and can be done “relatively within a relatively short period of time after retirement — a few years at most,” Tamboretti said. This window is typically before incomes are lower and Social Security and required minimum distributions begin.
She added that missing out on this opportunity could mean permanently higher taxes for retirees and their heirs who inherit Roth conversion accounts tax-free.
Worse, “it could mean (missing out on) hundreds of thousands of dollars in tax-free transfers to the next generation.”
When planning for taxes, timing is key, Tamboriti said. Retirees often focus on reducing taxes year by year rather than focusing on income and tax brackets over time. Temporiti noted that this short-term thinking can lead to higher lifetime taxes, especially for retirees with uneven sources of income from business sales, real estate or deferred compensation.
“At certain times, it might make sense to recognize more income and pay less tax or to defer income and avoid taxes,” Tamboriti said. “Managing tax brackets is a multi-year game.”
She emphasized that it is important for retirees to understand their income sources during retirement and future liquidity events.
Annette Harris, accredited financial advisor and founder of Harris Financial Coaching, says that once required minimum distributions (RMDs) begin, it can complicate delayed tax planning because most retirees don’t know how to effectively begin distributing taxable RMDs.
Without advance planning, RMDs can push retirees into higher tax brackets, increase health insurance premiums and force withdrawals of unwanted expenses. “This could increase taxes on retirees who have limited income,” Harris added.
Temporiti added that it’s important for retirees to have a clear understanding and projection of what their RMDs might be, because “developing a multi-year cash flow plan that minimizes RMDs is key to not paying more taxes than needed.”
Many retirees donate generously to charity but fail to use the most tax-efficient methods. “Writing a personal check instead of using a qualified charitable donation can leave valuable tax benefits,” Harris said.
“Qualified charitable distributions (QCDs) directly from an IRA to a qualified charity can count toward your RMD, and the amount will not count toward your taxable income,” she advises.
Temporiti also recommends working with a financial advisor to ensure retirees choose the right assets to leave to charity, either by naming retirement account beneficiaries or using donor-advised funds.
Temporiti explains that health insurance premiums are calculated based on income two years ago, meaning ill-timed income decisions can increase medical costs later. Retirees often lament tax moves that may seem innocuous at the time but result in higher premiums.
“Retirement doesn’t necessarily mean a drop in income, and it’s important to work with an advisor who looks at all your income sources and how they will contribute to your income,” she stresses.
Tax decisions related to an estate are among the most difficult issues to resolve later. Retirees who delay coordinating Roth conversions, charitable gifts, and family support often miss the opportunity to reduce taxes while supporting heirs more efficiently.
“There are many ways to provide financial support that can be beneficial to both parents and adult children from an estate planning perspective,” Temporiti said.
In retirement, the biggest tax regrets often come not from making the wrong decision but from waiting too long to make one.
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This article originally appeared on GOBankingRates.com: 7 Tax Initiatives Retirees Will Regret Waiting for in 2026
