If you’re retired or approaching retirement in Surprise, Arizona, it’s understandable if 2026 feels like “just another year” on the calendar—especially if your day-to-day income seems steady.
But I hear a different story from many families: “We’re doing okay… we just don’t want an avoidable mistake to snowball into higher taxes, higher Medicare premiums, or unnecessary stress later.” That’s exactly why 2026 can be a meaningful year to revisit your retirement income plan.
Retirement income planning isn’t only about choosing investments. It’s about coordinating a set of moving parts—taxes, Social Security, Medicare premiums, required minimum distributions (RMDs), and Roth conversions—so that one decision doesn’t create an unintended ripple effect elsewhere.
Surprise is home to a large and growing retiree community. According to U.S. Census Bureau data, about 22.2% of Surprise residents are age 65 or older, and the city has a 79.1% homeownership rate. Those numbers reflect what many of us see locally: households that have worked hard to build savings and equity, and now want a clear, confident strategy for turning those resources into dependable retirement income.
1) 2026 tax changes may influence your withdrawal strategy
The IRS has announced 2026 inflation adjustments across many tax provisions, including tax brackets and the standard deduction. For 2026, the standard deduction is:
- $32,200 for married couples filing jointly
- $16,100 for single filers
- $24,150 for heads of household
The top federal rate remains 37%, but bracket thresholds have shifted. For example, the 22% bracket begins above $100,800 (married filing jointly) and above $50,400 (single) in 2026.
Why does this matter in retirement? Because your taxable income often comes from multiple sources, such as:
- Traditional IRA or 401(k) withdrawals
- Pensions
- Interest/dividends from taxable accounts
- Capital gains
- Part-time work or consulting
- Social Security benefits
- Roth conversions
A helpful planning mindset shift is moving from:
“How much income do I need this year?”
to:
“How can I generate the income I need while managing taxes over the next 5, 10, or 20 years?”
In other words, the most tax-efficient move is not always the one that produces the lowest tax bill this year. In some cases, it may be worth recognizing income in a lower bracket now to reduce the likelihood of larger taxable withdrawals later.
2) Social Security is rising in 2026—but planning still matters
Social Security beneficiaries will receive a 2.8% cost-of-living adjustment (COLA) for 2026, according to the Social Security Administration.
That increase can help offset ongoing cost pressures. However, higher benefits don’t automatically mean your plan is “set,” because additional income can affect the taxable portion of Social Security depending on your overall income picture.
This is where coordination becomes important: IRA withdrawals, Roth conversions, pensions, capital gains, and even part-time earnings can increase provisional income, potentially causing more of your Social Security benefit to be taxable.
Also, for those who claim benefits before full retirement age and continue working, the 2026 earnings test limits changed:
- $24,480 for those under full retirement age
- $65,160 in the year you reach full retirement age (before different withholding rules apply)
3) Medicare premiums and IRMAA can catch retirees off guard
Medicare is often one of the most overlooked “line items” in retirement income planning—until premiums rise.
For 2026, the standard Medicare Part B premium is $202.90 per month.
Some higher-income retirees pay additional surcharges through IRMAA (Income-Related Monthly Adjustment Amount). In 2026, Part B IRMAA begins when modified adjusted gross income is above:
- $109,000 for single filers
- $218,000 for married couples filing jointly
This is why timing matters with large IRA withdrawals (or sizable Roth conversions). A strategy that looks smart from a tax-bracket perspective may still push income above an IRMAA threshold—potentially increasing Medicare premiums later.
To be clear, this doesn’t mean Roth conversions are “bad.” It means they should be evaluated alongside your entire retirement income plan, not in isolation.
4) RMDs can increase taxable income later—whether you need it or not
RMDs are mandatory withdrawals from many tax-deferred retirement accounts. Generally, IRA owners must begin RMDs by April 1 of the year after the calendar year they reach age 73, then continue annually (typically by December 31 each year).
Missing an RMD can be expensive. The IRS notes a potential 25% excise tax on the amount not withdrawn (reduced to 10% if corrected within two years).
More importantly, RMDs can create a “retirement tax squeeze” because they add taxable income even if you don’t need the cash. That additional income may affect:
- Your federal income tax bracket
- How much of your Social Security is taxable
- Medicare IRMAA surcharges
- Capital gains planning
- Estate and beneficiary outcomes
A key planning insight: the after-tax value of accounts matters as much as the balance. A $1 million traditional IRA and a $1 million Roth IRA may not create the same after-tax spending power.
5) Roth conversions may help—but the “right amount” is the strategy
A Roth conversion moves money from a traditional IRA (or other pre-tax retirement account) into a Roth IRA. The converted amount is generally taxable in the year of conversion, while future qualified Roth withdrawals may be tax-free.
Roth conversions can be especially relevant in the years after you stop working but before RMDs begin—sometimes called a tax planning window.
A partial Roth conversion strategy may help you:
- Reduce future RMDs
- Create more tax-diversified retirement income
- Improve flexibility for a surviving spouse
- Leave potentially more tax-efficient assets to heirs
But conversions aren’t automatically right for everyone, and timing is everything. A helpful checklist includes:
- How much can be converted without jumping into an undesirable bracket?
- Could the conversion trigger or increase IRMAA?
- How might it affect Social Security taxation?
- Do you have non-retirement funds available to pay the tax?
- How does this decision affect a surviving spouse or beneficiaries?
The goal isn’t simply “do a Roth conversion.” The goal is to convert the right amount, in the right year, for the right reason.
6) A practical 2026 retirement income review checklist
For many households across Surprise, Sun City Grand, Peoria, Goodyear, Buckeye, and the West Valley, the best plans start with a coordinated review. Here are seven steps that often bring clarity:
- Tax projection: Estimate 2026 taxable income before major moves.
- Social Security review: Evaluate claiming choices in the context of taxes and cash flow.
- Medicare IRMAA check: Identify whether additional income could raise premiums.
- RMD forecast: Project future RMDs before they begin.
- Roth conversion analysis: Determine whether partial conversions may fit your plan.
- Withdrawal order strategy: Consider which accounts to use first (taxable, traditional, Roth, cash).
- Survivor planning: Model what happens when one spouse passes and the survivor files as single.
Final thoughts: 2026 is a planning opportunity
Retirement income planning in 2026 is about coordination—making sure taxes, Social Security, Medicare, RMDs, and Roth conversions work together rather than accidentally working against each other.
If you’re retired or nearing retirement in Surprise, Arizona, now may be a good time to ask whether your current strategy is built for tax efficiency, health-care costs, and long-term flexibility.
Need help reviewing your 2026 retirement income plan? Let’s schedule a retirement income review to talk through how taxes, Social Security, Medicare, RMDs, and Roth conversions may fit together in your situation.
Cetera Advisors LLC exclusively provides investment products and services through its representatives. Although Cetera does not provide tax or legal advice, or supervise tax, accounting or legal services, Cetera representatives may offer these services through their independent outside business. This information is not intended as tax or legal advice.