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Required Minimum Distributions: How to Lower Taxes Before They Start Thumbnail

Required Minimum Distributions: How to Lower Taxes Before They Start

Retirement Planning

Required Minimum Distributions (RMDs) are one of the most important — and frustrating — retirement tax rules. Once you reach age 73 (or 75 for younger cohorts), the IRS requires you to withdraw money from traditional IRAs and 401(k)s whether you need it or not.

For many retirees, RMDs can push them into higher tax brackets, trigger Medicare surcharges (IRMAA), and increase taxes on Social Security.

Here’s how to plan ahead and reduce the tax bite.

Why RMDs Create Tax Problems

  • They force out taxable income whether you need the money or not.
  • They can push your marginal tax rate higher.
  • They increase Medicare Part B & D premiums.
  • They can cause up to 85% of Social Security to become taxable.
  • They shrink opportunities for Roth conversions later in life.

Waiting until RMD age means you lose control of when and how you pay taxes.

Strategies to Lower RMD Taxes Before They Start

1. Roth Conversions in Low-Tax Years

Converting IRA assets to Roth before age 73 reduces future RMDs and provides tax-free growth.

Great years to convert:

  • Recently retired but not yet taking Social Security
  • High itemized deductions
  • Low earned income years
  • Years before large pension income begins

2. Delay Social Security

This opens low-income windows where you can do Roth conversions or partial withdrawals at favorable tax rates.

3. Consider “filling up” tax brackets

Intentionally take IRA withdrawals up to the top of the 12% or 22% bracket to avoid being forced into higher brackets later.

4. Use Qualified Charitable Distributions (QCDs)

After age 70½, you can donate up to $111,000 (2026) directly from your IRA. QCDs:

  • Count toward RMDs
  • Are NEVER taxable
  • Reduce AGI (helping IRMAA and Social Security taxation)

5. Smooth withdrawals before RMD age

Taking smaller withdrawals in your late 60s or early 70s can limit the size of future RMDs.

Final Thoughts

With thoughtful planning, you can significantly reduce RMD-related taxes. The earlier you start modeling future income, the more opportunities you have to save.

I help clients run these projections and build multi-year tax strategies that keep retirement income efficient and predictable.

By James Blue, Fee-Only Advisor | Blue Advisors

James Blue is the founder of Blue Advisors, a fee-only financial planning and investment management firm based in Columbus, Ohio.


This content is provided for informational and educational purposes only and should not be construed as personalized investment, tax, or legal advice. The views expressed are those of the author as of the date published and are subject to change without notice. Blue Advisors is a fee-only registered investment advisory firm. Advisory services are offered only pursuant to a written advisory agreement and to clients in the State of Ohio, the Commonwealth of Pennsylvania, and other jurisdictions where Blue Advisors is properly registered or exempt from registration. Past performance is not indicative of future results. Readers should consult with their financial advisor, tax professional, or attorney before making financial decisions.