Social Security's cost-of-living adjustment (COLA) does not change your IRA required minimum distribution (RMD) amount. COLA is the yearly inflation increase for Social Security benefits, while an RMD is the minimum yearly withdrawal the IRS requires from a traditional IRA. The interaction matters for taxes, not for the calculation. The Social Security Administration set a 2.8% COLA for 2026, raising benefits for about 75 million Americans starting January 2026, according to the 2026 COLA fact sheet.
Table of Contents
- How is your RMD calculated?
- When must you take RMDs?
- Why can COLA raise your tax bill?
- How can you limit the overlap?
How is your RMD calculated?
Your RMD comes from your own IRA balance, not from Social Security. As the American College Adviser blog explains, COLA applies only to Social Security income, while IRAs have no COLA and must be invested for growth, in its inflation guidance.
Divide your prior December 31 IRA balance by the IRS life-expectancy factor. The IRS uses 26.5 at age 73, so a $500,000 balance produces about $18,868, according to the IRS RMD FAQs.
When must you take RMDs?
Traditional IRA owners must start RMDs at age 73 if born in 1951-1959. Owners born in 1960 or later must start at age 75 under SECURE 2.0.
Roth IRAs have no lifetime owner RMDs. Check your birth year before you plan withdrawals, because the start age controls penalties and timing.
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Why can COLA raise your tax bill?
Traditional IRA RMDs count as ordinary taxable income. A larger COLA-boosted Social Security check plus the RMD can push combined income over the thresholds that make benefits taxable.
Single filers with combined income over $34,000 and joint filers over $44,000 can owe tax on up to 85% of benefits, according to the SSA tax guide. Those thresholds are fixed and not indexed to COLA, so inflation plus a rising RMD can create bracket creep.
How can you limit the overlap?
Owners age 70½ or older can send a qualified charitable distribution directly from an IRA to charity. It counts toward the RMD but is excluded from income, limiting the COLA-plus-RMD tax increase, according to Morningstar's IRA strategy guide. Useful checks before year-end: A direct transfer must go from the IRA to the charity to keep the income exclusion.
- Estimate combined income with both the new Social Security amount and the RMD
- Confirm the RMD deadline and amount from the prior year-end balance
- Ask the IRA custodian about direct payment rules for a charitable distribution
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