Goldman Sachs projects AI will drive S&P 500 earnings up 22% this quarter. For retirees with pretax savings, that rally is enlarging the required minimum distribution the IRS will eventually force at 73.
The 68-year-old retiree reading his brokerage statement this summer saw a number he did not expect a year ago. His traditional 401(k) just crossed a new milestone on the strength of an AI-driven earnings surge Goldman Sachs strategists expect to continue. The statement does not show the second number moving in lockstep: the size of the required minimum distribution the IRS will eventually force him to take.
The RMD mechanic is simple and largely invisible. For retirees born between 1951 and 1959, the first mandatory withdrawal arrives at age 73; those born in 1960 or later wait until 75, per the IRS rules governing traditional IRAs and 401(k)s. Each year's required withdrawal equals the prior December 31 account balance divided by a life-expectancy factor from the IRS Uniform Lifetime Table. The divisor is fixed; the balance is not. Every dollar of market gain in a pretax account today becomes a fraction of a forced taxable withdrawal for the rest of the account holder's life.
Goldman Sachs's June 2026 S&P 500 forecast ties that bull case to continued AI capex and energy-sector strength, with a 2026 price target framed around 8,000 and projected Q2 EPS growth near 22%, per the bank's published research note. Independent coverage has largely echoed the framing without independently re-forecasting the target, from TheStreet and Investing.com to Tokenist's note on the 8,000 call. The growth assumption is one bank's projection, not a consensus number.
A bigger RMD does more than raise the income tax bill. Once mandatory withdrawals rise enough, they can push Social Security benefits into ordinary income, and Medicare Part B premiums scale with income. The gain on the brokerage statement is partly an advance payment on a future tax bill that arrives in three forms at once: federal and state income tax, Social Security taxation, and Medicare premium surcharges.
For a 68-year-old today, the planning runway is narrow but real. The IRS forces the first withdrawal at 73, which gives roughly five years to act before the formula locks in. Three commonly cited planning moves fit inside that window.
Partial Roth conversions in lower-bracket years shrink the pretax balance the divisor will eventually tax, shifting future forced withdrawals into accounts the IRS cannot reach. Qualified Charitable Distributions from a traditional IRA, available starting at age 70½, let retirees direct up to a capped annual amount straight to charity, satisfying part of the future RMD without adding it to taxable income. And rebalancing away from concentrated positions during the current rally keeps the December 31 balance that feeds next year's calculation smaller than it would otherwise be.
The window closes permanently at the first forced withdrawal. The IRS divisor and the December 31 balance are the inputs, and once the first RMD is taken, the formula runs on a fixed schedule for the rest of the account's life. The current rally is making that formula's output unusually large. Readers with five or more years before their first forced withdrawal still have time to change what the formula produces.