What is the best strategy to reduce RMDs?

The most powerful RMD reduction strategies are: (1) Roth conversions before age 73 — converting traditional IRA/401k funds to Roth eliminates those balances from future RMD calculations permanently; (2) QLAC purchase — up to $145,000 of IRA assets can be placed in a Qualifying Longevity Annuity Contract, removing that balance from RMD calculations until income begins at 80-85; (3) Qualified Charitable Distributions (QCDs) — up to $105,000/year in direct IRA-to-charity transfers satisfy RMD requirements without the money being included in AGI; (4) Spend down traditional IRA voluntarily before 73 if you are in a lower tax bracket than you expect later.

How much is required minimum distribution at age 73?

At age 73, the IRS Uniform Lifetime Table factor is 26.5. Divide your December 31 IRA balance by 26.5 to get your RMD. Example: $500,000 IRA ÷ 26.5 = $18,868 RMD. At $800,000: $800,000 ÷ 26.5 = $30,189 RMD. The RMD factor decreases each year (meaning you must withdraw a larger percentage), so a $500,000 IRA at age 80 has a factor of 20.2, requiring a $24,752 withdrawal. RMDs can push you into higher tax brackets and trigger IRMAA surcharges on Medicare premiums, which is why proactive planning before age 73 is valuable.

Do you have to take RMDs from a Roth IRA?

No. Roth IRAs are the only retirement account type exempt from RMDs during the original owner's lifetime (as of the SECURE 2.0 Act, effective 2024). Roth 401(k)s were previously subject to RMDs, but SECURE 2.0 eliminated Roth 401(k) RMDs as well. This makes Roth accounts uniquely valuable for tax planning — they grow tax-free, are never forced to be distributed, and can be left to heirs. Inherited Roth IRAs are subject to the 10-year rule for most non-spouse beneficiaries, but distributions remain tax-free.

RMD Strategies: How to Minimize Required Minimum Distributions in Retirement

Required Minimum Distributions are mandatory annual withdrawals from traditional IRAs, 401(k)s, and most other pre-tax retirement accounts. Starting at age 73, the IRS requires you to withdraw a minimum amount each year — whether you need the money or not — and pay income tax on it. With planning, RMDs are manageable. Without planning, they can push you into higher tax brackets and increase Medicare costs.

RMD Basics: When, How Much, and From What

Rule	Details
Starting age	Age 73 (SECURE 2.0, for those born 1951-1959); age 75 for those born 1960 or later
First RMD deadline	April 1 of the year after you turn 73 (delay once; two RMDs that year)
Subsequent RMDs	December 31 of each year
Accounts subject to RMD	Traditional IRA, 401(k), 403(b), 457(b), SEP IRA, SIMPLE IRA, inherited accounts
Accounts exempt from RMD	Roth IRA (owner’s lifetime); Roth 401(k) (after 2024)
Penalty for missing RMD	25% of the missed amount (reduced to 10% if corrected within 2 years)

RMD Calculation by Age

Formula: Prior year December 31 account balance ÷ IRS Uniform Lifetime Table factor

Age	IRS Factor	% of Account Required
73	26.5	3.77%
75	24.6	4.07%
77	22.9	4.37%
80	20.2	4.95%
83	17.7	5.65%
85	16.0	6.25%
88	13.7	7.30%
90	12.2	8.20%
95	9.6	10.42%

RMD Dollar Amounts at Various Balances

Age	$300,000 IRA	$500,000 IRA	$800,000 IRA	$1.5M IRA
73	$11,321	$18,868	$30,189	$56,604
75	$12,195	$20,325	$32,520	$60,976
80	$14,851	$24,752	$39,604	$74,257
85	$18,750	$31,250	$50,000	$93,750
90	$24,590	$40,984	$65,574	$122,951

Problem with large balances: A $1.5M traditional IRA at age 73 requires $56,604/year minimum — even if you don’t need it — potentially bumping you into a higher tax bracket and triggering IRMAA surcharges.

Strategy 1: Roth Conversions Before Age 73

The most powerful RMD reduction tool is converting traditional IRA funds to Roth IRA before RMDs begin:

Age	Traditional IRA Balance	Annual Conversion	Tax Cost	Balance at 73	RMD at 73
No conversion	$800,000 at 65 → grows to…	$0	$0	~$1,290,000	~$48,679
Convert $50K/year (65-72)	$800,000 at 65	$50,000	~$11,000/yr at 22%	~$890,000	~$33,585
Convert $100K/year (65-72)	$800,000 at 65	$100,000	~$22,000/yr at 22%	~$490,000	~$18,491

Key point: Converting $50,000/year for 8 years (ages 65-72) costs roughly $88,000 in taxes today — but saves significantly more in future RMD taxes if you’re in a higher bracket at 73, and eliminates RMDs on the converted amount permanently.

Optimal Roth conversion strategy: Fill up your current tax bracket each year. If you’re in the 22% bracket, convert enough to bring taxable income to the top of the 22% bracket without crossing into 24%.

Bracket-Filling Approach

2026 Bracket	Single	Married Filing Jointly
10%	Up to $11,925	Up to $23,850
12%	$11,925-$48,475	$23,850-$96,950
22%	$48,475-$103,350	$96,950-$206,700
24%	$103,350-$197,300	$206,700-$394,600

Example: Retired at 65, Social Security of $28,000/year, no other income. Top of 22% bracket (MFJ) = $206,700 taxable income. Available room = $206,700 − $28,000 − $29,200 (standard deduction) = $149,500 in Roth conversion per year at or below 22%.

Strategy 2: Qualified Charitable Distributions (QCDs)

A QCD allows you to direct an IRA distribution directly to a qualified charity — satisfying your RMD without the money ever touching your taxable income.

Feature	Details
Annual limit	$105,000 per person (2026; inflation-indexed)
Eligible accounts	Traditional IRA only (not 401k directly; must roll to IRA first)
Minimum age	70½ (can start before RMDs begin)
Tax treatment	Excluded from AGI entirely — reduces taxable income, IRMAA base, ACA impact
Charitable deduction	No — you can’t double-dip (QCD = excluded from AGI, not deductible again)
Satisfies RMD?	Yes — counts toward RMD for the year

QCD example: Retiree with $650,000 IRA at 75, RMD = $26,423. Normally donates $15,000/year to charity. By doing QCD: $15,000 excluded from AGI, $11,423 RMD remainder taken as cash. Net taxable income reduced ~$15,000 vs. traditional approach.

Particularly powerful for IRMAA management: The QCD reduces MAGI, potentially keeping you below IRMAA Medicare surcharge thresholds.

Strategy 3: QLAC Purchase for RMD Reduction

A Qualifying Longevity Annuity Contract reduces the IRA balance subject to RMD:

Feature	Details
2026 QLAC limit	Lesser of $145,000 or 25% of all qualifying account balances
Effect on RMDs	QLAC balance excluded from account value in RMD calculation
Income start	Can be as late as age 85; income must begin by 85
Tax on payments	Ordinary income when payments begin

QLAC RMD reduction example:

Age 68, $700,000 traditional IRA
Purchase $145,000 QLAC
RMD calculated on $555,000 (not $700,000) from ages 73-85
Annual RMD savings: ~$2,000-$3,500/year depending on age
At 82, QLAC begins paying $2,800-$3,400/month for life

Strategy 4: Spend Down Pre-Tax Accounts Early

Before RMDs begin, voluntarily withdrawing from traditional IRA/401(k) at favorable tax rates reduces the future RMD-generating balance:

Scenario	Action	Why
Retired at 62, low income	Withdraw $35,000-$50,000/year from traditional IRA	You’re in the 12% bracket now; RMDs might push you to 22% or 24% later
Bridge to Social Security delayed	Use traditional IRA withdrawals to live on while delaying SS to 70	Reduces IRA balance; SS delay gives larger, inflation-indexed income later
Low-income year (one-time)	Large IRA withdrawal to reduce balance	Take advantage of the gap

Strategy 5: Aggregate RMDs Across Multiple IRAs

If you have multiple IRAs, you can aggregate RMDs:

Calculate RMD separately for each IRA
Total the amounts
Take the aggregate from any one (or combination) of the IRAs

This does not reduce the total RMD amount, but allows you to choose which account to draw from — useful for tax-loss harvesting or maintaining desired allocations in specific accounts.

Note: 401(k) RMDs must be taken from each account separately; they cannot be aggregated with IRA RMDs.

IRMAA and RMD Interaction

Large RMDs can trigger IRMAA (Income-Related Monthly Adjustment Amount) Medicare premium surcharges:

MAGI (MFJ) 2026	Medicare Part B Premium	Annual Surcharge
Up to $212,000	$185/month	$0
$212,001-$266,000	$259/month	~$888/year
$266,001-$334,000	$369/month	~$2,208/year
$334,001-$400,000	$479/month	~$3,528/year
Above $400,000	$590/month	~$4,860/year

Per person, per year. A married couple at $280,000 MAGI pays ~$4,416 more in Medicare premiums annually vs. a couple at $200,000.

Strategies that reduce MAGI (QCDs, Roth conversions before 73, reducing IRA balance) directly reduce IRMAA exposure.

When to Take Your First RMD

Option	Tax Impact	Strategy
Take RMD in the year you turn 73	Normal income for that year	Default choice for most
Delay first RMD to April 1 of following year	Two RMDs in year 2 (April and December)	Only beneficial if you expect significantly lower income in year 2

Warning: Taking two RMDs in one year $can push you into a higher bracket and trigger IRMAA. Usually better to take the first RMD in the year you turn 73 unless income circumstances clearly favor delay.