One of the big perks of being retired is not having many things on your to-do list. As the end of the year approaches, though, there are three tasks that you need to put on there.
These three tasks are critical to managing your finances and making sure that you're in a good position going into 2026. Here are the three essentials to tackle.
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1. Make sure you've complied with RMD rules
Ensuring you've followed the rules for required minimum distributions (RMDs) is one of the first and most important tasks that you must complete before 2026. RMDs are required for certain tax-advantaged retirement plans. This includes traditional 401(k)s and IRAs.
Generally, you must begin taking your RMDs once you have reached the age of 73 if you were born in 1951 through 1959, or the age of 75 if you were born in 1960 or later. If you fail to do so, there are steep penalties for not withdrawing the required minimum amount.
You should determine if you're required to take RMDs based on your age and account type and, if so, see what you have withdrawn from your retirement account so far this year. If you haven't taken out at least the required minimum amount, do so ASAP to avoid a big and pointless hit to your account balance from the large fees you owe the IRS due to the oversight.
2. Check your Social Security COLA
Checking the amount of your Social Security raise is also another important task that seniors need to do before the new year.
If you are collecting Social Security benefits, you are entitled to a Social Security COLA in 2026. This is a benefit increase that happens in most years to help ensure your benefits keep pace with inflation.
For 2026, your COLA is 2.8%. This means that your benefits should increase by close to this amount, minus the additional costs that you'll have to pay for rising Medicare premiums, which are increasing by $17.90 next year.
Understanding how the amount of your check will change is important to your retirement planning efforts since you need to adjust your budget to account for the new Social Security income you have coming in.
It's also worth remembering that these benefits are intended to help you keep pace with inflation and not to increase your standard of living. You don't necessarily want to commit to any new big expenses just because of the COLA you have coming. Instead, see what budget adjustments you need to make to ensure the money goes as far as it can to help you maintain your lifestyle.
3. Review your investments and rebalance if necessary
Finally, the last key step that you should take is to review any investments you have in your retirement plans or in your taxable brokerage account.
It's critical that retirees are exposed to the right level of risk when it comes to retirement investing because there is little time to wait for a recovery. If you are overinvested in stocks or have too much of your assets in one company, one industry, or one field, and that part of the market does poorly, you could lose a lot of money.
Since you are older and probably withdrawing money from your retirement account regularly to help you cover your costs of living, you can't necessarily wait for the market to recover if you need to take out money during a period where you've just suffered some major losses. While it's inevitable that high-quality assets will eventually bounce back, if you don't have time for your investments to do that, you lock in those losses and increase your risk of running out of money too soon.
You don't want to find yourself struggling with a lower portfolio balance because you took on too much risk or allowed your investments to become too concentrated. Instead, rebalance your portfolio to be sure you have the right asset allocation and a diverse array of investments.
By taking these three steps before the end of the year, you can make sure you're in a good place when 2026 rolls around.
