One of my clients — I’ll call him Gary — came to me at 74 completely blindsided. He had $1.8 million sitting in a traditional IRA, had lived frugally his whole retirement, and thought he was doing everything right. Then the IRS told him he had to pull out $72,000 that year whether he wanted to or not. He didn’t
need the money. He was already in the 22% bracket. And now this distribution was going to push part of his income into the 24% bracket and increase what he paid for Medicare. Nobody had warned him. And by the time he found me, the window to fix it had mostly closed. That’s the required minimum distribution trap. If you’re between 60 and 72 right now, you’re either setting yourself up to avoid it — or you’re setting yourself up to be Gary.
What RMDs Are and Why They’re a Tax Problem
The IRS requires you to withdraw a minimum amount from your traditional IRA, 401(k), and most other tax-deferred accounts starting at age 73. The amount is calculated by dividing your prior year-end balance by an IRS life expectancy factor. At age 73, that factor is 26.5. At 80, it drops to 20.2 — meaning the forced withdrawals get larger as a percentage of your account every single year. These distributions are added to your taxable income whether you need the money or not. That extra income can push you into a higher tax bracket, increase the taxation of your Social Security benefits, and trigger Medicare surcharges known as IRMAA. Miss an RMD entirely, and you’ll owe a 25% excise tax on the amount you should have taken — though that drops to 10% if you correct the mistake within
two years. The real problem isn’t the RMD itself. It’s that most people don’t plan for it until it’s too late to do much about it.
Strategy #1: Roth Conversions in Your 60s
The most powerful tool I use with clients is a multi-year Roth conversion strategy, executed during what I call the Golden Window — the years between retirement and age 73 when income is often at its lowest. Here’s the logic: every dollar you convert from a traditional IRA to a Roth IRA now is a dollar that will
never generate an RMD. Roth IRAs have no required minimum distributions for the original owner. You pay the tax today, at rates that may be lower than your future RMD-driven rate, and you permanently reduce the balance that will be subject to forced withdrawals later. The key is executing these conversions carefully — filling up your current tax bracket without spilling into the next one, and keeping your income below the Medicare surcharge thresholds. That’s where having a CPA do this work matters. This is not a set-it-and-forget-it calculation. It’s an annual decision based on your full financial picture.
Strategy #2: Qualified Charitable Distributions (QCDs)
If you’re charitably inclined and over 701⁄2, a Qualified Charitable Distribution is one of the most tax-efficient moves available. In 2026, you can direct up to $111,000 per year from an IRA directly to a qualified charity. That transfer counts toward your RMD for the year — but it never shows up in your
taxable income. For clients who are already giving to their church, alma mater, or a cause they care about, this is a straightforward swap: instead of writing a check from your bank account, you send the money directly from your IRA. You get the deduction without needing to itemize.
Strategy #3: Begin Systematic Withdrawals Before 73
This one sounds counterintuitive, but sometimes the right move is to start pulling money out of your IRAin your late 60s — even if you don’t need it — to drain down the balance before RMDs begin. If you’re in the 12% or 22% bracket during those early retirement years, taking controlled distributions now can be cheaper than being forced into larger distributions later at higher rates. Combined with Roth conversions, this approach can dramatically reduce the account balance that generates future RMDs.
The Bottom Line
RMDs are not a surprise for anyone who plans ahead. The mistake is waiting until 72 or 73 to think about them. By then, your options are limited. The clients I’ve worked with who handle this best are the ones who start the conversation years before the first distribution is due. If you’re approaching retirement and haven’t stress-tested your IRA balances against future RMD projections, that’s the first conversation we should have.
Want a personalized RMD, IRMAA, or Social Security plan that fits your exact numbers? Schedule a retirement
tax review with me at Creative Financial Group.
This article is for informational and educational purposes only and does not constitute personalized tax, legal, or
financial advice. Tax laws are subject to change. Please consult a qualified CPA or tax professional regarding
your individual situation.