80% of retirees are sitting on their nest eggs too long — and a new $6,000 tax break is slipping away

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The core habits that helped you build a sizable retirement nest egg might also be silently sucking away the joy from your retired years.

For many savvy savers and investors, delayed gratification is the engine of their financial success. They've probably spent decades maxing out 401(k) plans, reinvesting dividends and resisting the urge to splurge. That instinct to leave money untouched does not switch off the day you stop working. So, when required minimum distributions kick in at age 73, millions of retirees take out the smallest amount the IRS allows and not a dollar more.

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That looks like prudence. It is often a mistake. Here's why.

Roughly 80% of retirees didn't tap into their retirement accounts until required minimum distributions (RMD) kicked in, according to JP Morgan research cited by CNBC (1). IThat means many older Americans are waiting for the government to force them to take money out of their retirement accounts.

To be fair, this research was conducted between 2013 and 2018, and a lot has changed since then, including the RMD age (2). But it's fair to assume that a significant number of retirees in 2026 are delaying withdrawals until they're obligated to do so.

This is a problem for two reasons: timing mismatch and tax deductions.

First, waiting until RMD age generates cash flow at the wrong time. Analysis of actual spending patterns by JP Morgan (3) suggests that most retired household spending peaks early (during their 60s) and gradually declines with age. In other words, you're more likely to need the cash during the go-go years of your 60s, when you're still in full health and enjoying active vacations, rather than your mid-70s or 80s.

Second, President Donald Trump's overhaul of the tax code has created another reason to withdraw early. The One Big Beautiful Bill Act (4) unlocks a new enhanced deduction for taxpayers aged 65 and older worth $6,000 ($12,000 for married couples if both qualify). This new deduction is only available through 2028, so there isn't much time to take advantage of it.

Simply put, if you're in your 60s, there's plenty of reasons to take early withdrawals now rather than wait for your 70s. If you're unsure about the best way to optimize withdrawals, there are several ways to make the process easier.

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Navigating withdrawals from retirement accounts isn't easy, especially if you're trying to minimize the tax bill along the way.

If you don't need the cash right away but don't want to leave it idle until RMDs, you could consider investing the withdrawals in alternative assets like real estate. Platforms like Arrived can help you gain exposure to vacation homes and rental properties that offer steady cash flows over several years.

Backed by world-class investors, including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties , earning a passive income stream without the extra work that comes with being a landlord of your own rental property.