How RMDs affect your taxes, Social Security and Medicare

A required minimum distribution looks simple: the IRS makes you take a set amount out of a traditional IRA each year, and you pay income tax on it. But an RMD does not just add its own tax. It raises the income that decides how much of your Social Security is taxable, whether you keep the full senior deduction, and, two years later, what you pay for Medicare. For many retirees those knock-on effects are bigger than they expect.

This guide works through the effects with real 2027 figures from the IRS and Medicare, using one retiree at four different IRA sizes, and then covers the rules that can soften them.

How big the RMD is

RMDs start at 73. The amount is last year's year-end balance divided by the figure for your age in the IRS Uniform Lifetime Table. At 75 the figure is 24.6, so the RMD is about 4.1% of the balance, and the share grows every year. The RMD rules guide covers deadlines and the first-year trap.

One retiree, four IRA sizes

Take a single person, 75 in 2027, with $30,000 of Social Security and a $20,000 pension, who takes only the required minimum from a traditional IRA. Here is what the IRS worksheets and 2027 tables give:

Our arithmetic: Uniform Lifetime figure 24.6 at 75; IRS Publication 915 Worksheet 1; 2027 standard deduction, extra amount at 65 and senior deduction; 2027 rate table.
IRA balance	RMD	Taxable Social Security	Adjusted gross income	Senior deduction	Federal income tax
No IRA	$0	$5,350	$25,350	$6,000	$65.00
$300,000	$12,195	$15,716	$47,911	$6,000	$2,529.32
$600,000	$24,390	$25,500	$69,890	$6,000	$5,166.80
$1,200,000	$48,780	$25,500	$94,280	$4,843	$10,103.60

The same for a married couple

A couple, both 75, filing jointly, with $48,000 of Social Security between them and a $30,000 pension:

Our arithmetic with the joint thresholds and the 2027 joint standard deduction, two age amounts and two senior deductions.
IRA balance	RMD	Taxable Social Security	Adjusted gross income	Senior deductions	Federal income tax
No IRA	$0	$14,500	$44,500	$12,000	$0.00
$500,000	$20,325	$31,776	$82,101	$12,000	$3,508.12
$1,000,000	$40,650	$40,800	$111,450	$12,000	$7,030.00
$2,000,000	$81,301	$40,800	$152,101	$11,748	$11,938.37

The pattern is the same: the RMD itself is taxed, and it also drags Social Security into taxable income until the 85% ceiling is reached. Even with the largest IRA, adjusted gross income of $152,101 stays under the $218,000 joint IRMAA threshold for 2026. Because their Social Security is already at the 85% ceiling, each extra dollar of withdrawals now raises income dollar for dollar, so about $65,899 more in one year would cross it.

Effect 1: more of your Social Security becomes taxable

With no IRA, $5,350 of this person's $30,000 in benefits is taxable. A $600,000 IRA's RMD of $24,390 pushes that to $25,500, which is 85% of the benefit, the most that can ever be taxable. In the zone between the IRS thresholds, each extra dollar of IRA income can make up to 85 cents more of Social Security taxable, so the RMD is effectively taxed on more than its own amount. The guide to how benefits are taxed explains the worksheet.

Effect 2: the senior deduction can shrink

The $6,000 deduction for people 65 and older, available through 2028, loses 6% of every dollar of modified adjusted gross income above $75,000 ($150,000 for joint filers). In the table, the largest IRA's RMD takes adjusted gross income to $94,280 and the deduction down to about $4,843. See the senior deduction guide.

Effect 3: Medicare premiums two years later

Medicare's income-related amounts are based on modified adjusted gross income from two years earlier. For 2026 they start above $109,000 on an individual return ($218,000 joint) and add $81.20 a month to Part B at the first step. None of the four cases above crosses that line, but a larger IRA, a pension of a different size, or a one-time withdrawal on top of the RMD could. The IRMAA guide has every bracket.

Ways the rules soften the blow

Qualified charitable distributions

From 70½ you can send IRA money directly to charity as a qualified charitable distribution, up to $114,000 for 2027. It counts toward your RMD but is not included in your income, so it avoids all three effects above. See the QCD guide.

Roth money has no RMDs for the original owner

IRS Publication 590-B says the original owner of a Roth IRA does not have to take distributions at any age. Money already in a Roth does not create RMDs, though converting traditional IRA money to a Roth is itself taxable in the year you convert. See the Roth withdrawal rules.

Several IRAs, one withdrawal

If you have more than one traditional IRA, you figure the RMD for each but can take the total from any one or more of them. That does not change the amount, but it can make it easier to take the money from the account you prefer.

Do not miss it

Missing an RMD can cost a 25% excise tax on the shortfall, reduced to 10% if corrected in time. The tax on the RMD itself is usually much smaller than that penalty.

Run your own numbers

Find your RMD with the RMD calculator.
Add it to your other income in the taxable Social Security calculator.
Check the result against the IRMAA brackets and the senior deduction phase-out.
Put the taxable income through the tax bracket calculator.