Every dollar in your traditional 401(k) or IRA has skipped income tax so far. Once you reach your RMD age, the IRS starts collecting, one required withdrawal at a time. These six RMD strategies can lower the taxes on those withdrawals, and some can shrink the withdrawals themselves.
Your RMD age is 73 if you were born from 1951 through 1959. It’s 75 if you were born in 1960 or later. From then on, you have to take a minimum amount out of your tax-deferred accounts every year. All of it counts as ordinary income.
What Is a Required Minimum Distribution?
A required minimum distribution (RMD) is the smallest amount the IRS makes you withdraw from a tax-deferred account each year. The rule covers traditional IRAs, SEP IRAs, SIMPLE IRAs, and workplace plans like 401(k)s and 403(b)s. You can always take more than the minimum.
The IRS sets each year’s minimum with simple division. It takes your account balance from Dec. 31 of the prior year. Then it divides that by a life expectancy factor from the IRS Uniform Lifetime Table. At 75, that factor is 24.6, so a $500,000 IRA means an RMD of about $20,300. The factor shrinks as you age, and the share you have to withdraw grows.
RMDs are taxed as ordinary income, at the same rates as a paycheck. A large one can push you into a higher bracket and make more of your Social Security taxable. It can also trigger Medicare IRMAA surcharges two years later. That’s why it pays to plan for RMDs before they start.
What Is the RMD Age?
Your RMD age depends on the year you were born. The SECURE 2.0 Act, signed in December 2022, raised it from 72 to 73 starting in 2023. It rises again to 75 in 2033.
| Year you were born | RMD age |
|---|---|
| 1950 or earlier | Already taking RMDs |
| 1951 through 1959 | 73 |
| 1960 or later | 75 |
Source: IRS required minimum distribution FAQs.
Your first RMD is due by April 1 of the year after you reach your RMD age. Every RMD after that is due by Dec. 31. Delaying the first one means taking two in the same year, which can stack up your taxable income. Miss an RMD, and the IRS can charge a 25% excise tax on the amount you didn’t take. Fix it within two years, and the tax drops to 10%.
A later RMD age gives your savings more years to grow tax-deferred. The catch is that the balance has to come out over fewer years. That can mean bigger withdrawals and a higher tax bill later. It also gives you more years for Roth conversions before RMDs begin.
6 RMD Strategies to Lower Your Taxes
The best RMD strategies do one of two things. They shrink the balance subject to RMDs before they start, or they send the money somewhere it won’t be taxed. Some retirees need their full RMD to pay the bills. Others have Social Security and a pension that cover the basics. For them, the RMD is extra income and an extra tax bill.
Either way, weigh each move against your whole plan. A strategy that saves on taxes this year can cost you flexibility later.
1. Give Through a Qualified Charitable Distribution (QCD)
A qualified charitable distribution (QCD) sends money straight from your IRA to a charity. Once you’re 70½, you can give this way. The gift counts toward your RMD and never shows up in your taxable income.
In 2026, you can give up to $111,000 through QCDs, and the limit rises with inflation each year. You can’t also deduct the gift, but you don’t need to itemize to get the tax benefit. QCDs work only from IRAs, so 401(k) money has to be rolled into an IRA first. Donor-advised funds and private foundations don’t qualify.
2. Buy a Qualified Longevity Annuity Contract (QLAC)
A qualified longevity annuity contract (QLAC) is a deferred income annuity you buy inside an IRA or 401(k). The money in it doesn’t count toward your RMDs until payments start. That can be as late as age 85. There’s a lifetime cap on how much you can move into QLACs, and it rises with inflation.
A QLAC trades flexibility for a smaller tax bill now and guaranteed income later. Once the money goes in, you can’t take it back out. Your payout depends on interest rates when you buy, so compare quotes from several insurers first.
3. Keep Working Past Your RMD Age
If you’re still working at your RMD age, you can delay RMDs from your current employer’s 401(k) until you retire. The plan has to allow it, and the exception covers only that plan. You can’t use it if you own 5% or more of the company.
IRAs don’t get this exception. If your plan accepts incoming rollovers, you can move pre-tax IRA money into it and delay RMDs on that money too.
Check the plan before you move anything. Look at its investment options and fees. A few years of delayed RMDs won’t make up for a plan that costs too much.
4. Convert Pre-Tax Savings to a Roth
A Roth conversion moves pre-tax money from a traditional IRA or 401(k) into a Roth account. Roth IRAs have no RMDs during your lifetime, so converting now shrinks your future RMDs.
You pay income tax on the converted amount in the year you convert. Many retirees convert in the years between retiring and starting RMDs, when their income and tax bracket tend to be lowest. Spreading conversions over several years keeps each year’s tax bill and IRMAA exposure in check.
5. Know the Rules for Roth 401(k)s and Inherited IRAs
Since 2024, Roth 401(k) accounts no longer require RMDs during the owner’s lifetime, thanks to SECURE 2.0. You no longer need to roll a Roth 401(k) into a Roth IRA just to avoid RMDs. Most non-spouse beneficiaries who inherit a Roth IRA have to empty it within 10 years, though qualified withdrawals stay tax-free.
Inherited traditional IRAs come with their own rules. Most non-spouse beneficiaries who inherited after 2019 have to empty the account within 10 years. They may also owe annual RMDs if the original owner had already started taking them. Spouses and a few other eligible beneficiaries can still spread withdrawals over their own life expectancy.
6. Choose Which Account to Withdraw From
If you have more than one IRA, you have to calculate the RMD for each one. You can then take the combined total from a single IRA or split it however you like.
That lets you sell from the account that’s up and give the one that’s down time to recover. The same flexibility applies across multiple 403(b)s. RMDs from 401(k)s are different: each plan’s RMD has to come out of that plan.
How to Plan for RMDs Before They Start
Planning for RMDs starts with projecting them years ahead and seeing how they stack up against your other income. A $1 million IRA at age 75 means an RMD of about $40,700. Add Social Security and a pension, and that withdrawal alone can move you into a higher bracket.
The Boldin Planner projects your RMDs year by year, using the life expectancy tables in IRS Publication 590-B. You can test Roth conversions, withdrawal order, and QCDs against those projections. You’ll see how each one changes your lifetime taxes.
The Roth Conversion Explorer maps out a multi-year conversion plan. It shows your taxes, cash flow, and estate value with and without the conversions.
Conclusion: Strategies for Required Minimum Distributions
RMDs follow fixed rules, and you still control a lot around them. You choose when to convert to Roth, which accounts to draw from, and how to give. The years before your RMD age give you the most room to act. Run the numbers on your own accounts while you still have time to use them.
FAQs: Strategies for Required Minimum Distributions
How do I reduce RMDs without hurting cash flow?
You can reduce future RMDs without squeezing your budget by drawing down tax-deferred accounts a little at a time in your 60s. Planned withdrawals in low-income years replace some of the larger forced ones later. Taxable savings or Roth money can cover spending in the years you’re doing Roth conversions.
Where do Roth conversions fit among RMD strategies?
Roth conversions fit best in the years between retirement and your RMD age, when taxable income is often lowest. Converting enough to fill your current tax bracket, without spilling into the next one, cuts the balance subject to future RMDs. If you’re under 59½, each conversion starts its own five-year clock for penalty-free withdrawals.
Do qualified charitable distributions lower taxes?
Qualified charitable distributions lower taxes for IRA owners 70½ or older who give to charity. The money goes straight from the IRA to the charity, counts toward that year’s RMD, and stays out of adjusted gross income. A lower AGI can also reduce Medicare IRMAA surcharges and the share of Social Security that gets taxed.
How do retirement planning ages change my RMD strategy?
A few key retirement ages shape an RMD strategy. At 59½, you can withdraw from retirement accounts without the 10% early withdrawal penalty. At 70½, you can start making qualified charitable distributions. RMDs begin at 73 or 75, depending on your birth year. The years before then are the best window for Roth conversions.
What withdrawal order helps minimize lifetime RMDs?
A common withdrawal order is taxable accounts first, then tax-deferred accounts, with Roth money saved for last. Pulling some money from tax-deferred accounts earlier, in low-income years, can shrink later RMDs and keep you in a lower bracket. The right mix depends on your income, your tax bracket, and what you want to leave to heirs.
