The start of a new year can be a good time for retirees to make a “to-do” list covering both short and long-term financial priorities. Here are seven to start with.
1. Estimate your cashflows
Do you have a firm grasp of how much money is coming in and where’s it’s going? If not, now may be a good time to compare your monthly or annual income to your anticipated expenses.
Inflows can include:
- Monthly Social Security, pension and annuity payments;
- Extra income from a part-time job;
- Required minimum distributions from your IRAs and 401(k) accounts; and
- Income generated by bank and taxable investment accounts.
Outflows can include:
- Monthly living expenses;
- Medicare and other insurance premiums;
- Mortgages, auto loans and credit card payments;
- Tax payments; and
- Anticipated one-time expenses for home repairs or vacations, gifts or charitable donations.
In the best-case scenario, inflows should be higher than outflows. But if the reverse is true, you’ll need to figure out how to restore this balance, either by reducing spending or withdrawing more money from your bank or investment accounts. Since some kinds of withdrawals may count as taxable income, you’ll need to assess their potential impact on your 2026 tax bill as well.
2. Calculate your Required Minimum Distribution (RMD)
If you have a significant amount of retirement money invested in stocks, chances are that RMDs from your IRAs and pre-tax 401(k) accounts could be higher this year. That’s because the S&P 500 closed the year up 17.9%, and RMDs for 2026 are based on the closing value of your retirement accounts on December 31, 2025.
In most cases IRA custodians and 401(k) recordkeepers will tell you how much you’ll need to take out of each account. But if you want to get a head start on calculating this amount, read our article on calculating RMDs.
RMDs are taxable, so you’ll want to know if they, in combination with other income sources, could potentially move you into a higher tax bracket, which might also result in higher Medicare premiums.
3. Reduce your RMDs by taking advantage of QCDs
If you’re worried about the tax impact of RMDs, one way you can reduce them is by taking advantage of Qualified Charitable Distributions (QCDs).
With a QCD, you withdraw money from your IRA to make a donation to a qualified nonprofit organization. You can subtract some or all of your QCD amount from your RMD. In 2026, the combined QCD limit from all IRA accounts is $111,000.
To use QCDs to reduce or eliminate your RMDs, you must make the QCD before you take your RMD.
Keep in mind that QCDs don’t count as tax-deductible charitable donations.
4. Change your Medicare coverage
If you’re unhappy with your current Medicare coverage, you can make certain changes during Medicare’s winter enrollment period.
During this period, which ends on March 31, you can:
- Switch from Medicare Advantage plan to another; or
- Switch from Medicare Advantage to Traditional Medicare Parts A and B plus optional Part D prescription drug coverage.
These changes go into effect the first day of the month following the month when you make the change.
5. Estimate your 2025 and 2026 tax bills
Many of the new tax benefits in the One Big Beautiful Bill Act could reduce your 2025 and 2026 tax bills.
Specifically:
- A new $6,000 per-person deduction for taxpayers over age 65 with adjusted gross incomes of less than $75,000 (single filers) or $150,000 (couples filing jointly).
- An increase in the state and local tax deduction limit from $10,000 to $40,000.
- The ability for some workers to deduct up to $25,000 in tips or up to $12,500 in overtime pay if they earn less than $150,000 per year.
- The ability to deduct up to $10,000 in auto loan interest each year for new vehicles that are assembled in the U.S.
- The ability for those who don’t itemize to deduct up to $1,000 in charitable donations each year.
You’ll also want to consider the potential tax impact of RMDs and other elective withdrawals from your pre-tax 401(k) and Traditional IRA accounts. These amounts count as taxable income, and, when combined with income from other sources, could move you into a higher tax bracket and potentially raise your monthly Medicare premiums.
6. Anticipate potential long-term care costs
You may be healthy right now, but should you or your spouse need long-term care, the annual costs for assisted living, memory care or skilled nursing care could be $100,000 per year or more. If these costs are worrisome, you may want to consider purchasing long-term care insurance. Some options offer death benefits for survivors if the full value of the long-term care benefit isn’t used
7. Review and update your estate plan
If you haven’t looked at your will or estate plan for a while, now might be a good time to make sure it’s in order. Issues to consider:
- Does your will still reflect your plans for distributing your assets among your survivors?
- Are primary and contingent beneficiaries for your bank, investment, and retirement accounts up to date?
- Have you assigned an executor for your estate?
- Have you been considering establishing a trust to avoid probate or to possibly remove assets from your estate and establishing greater control over the distribution of your wealth after you’ve passed on?
- Have you formally given someone you trust power of attorney to make critical healthcare and financial decisions for you if you become physically or mentally incapacitated?
- Have you discussed your interment and estate planning decisions with your children?
Don’t put it off
Understandably, many of these topics may seem overwhelming. But it’s important to consider them while you’re still physically and mentally healthy. If you don’t feel qualified making these decisions on your own, consider consulting with an estate or elder care attorney, tax professional, or financial advisor.
This article was authored by Michael Flaherty and Jeffrey Briskin. Michael is a senior financial advisor with Canby Financial Advisors, a SEC-registered investment adviser. SEC registration does not constitute an endorsement by the SEC nor a statement about any skill or training. Michael can be reached at 508.598.1082 or mflaherty@canbyfinancial.com. Jeffrey Briskin is Director of Marketing at Canby Financial Advisors.
©2026 Canby Financial Advisors.