That’s exactly why a tax-efficient drawdown strategy is worth building before the first RMD ever shows up. Here, we dive into RMD tax strategy itself: when it starts, how it lands on your tax bracket and Medicare premiums, and the moves that can soften the impact.
What Is a Required Minimum Distribution and When Do RMDs Start?
An RMD is the minimum amount the IRS requires you to withdraw each year from tax-deferred accounts like traditional IRAs, 401(k)s, and similar employer plans, once you reach a certain age. Under current law, that age is 73. The amount is calculated using your prior year-end account balance and an IRS life expectancy factor, so it grows as you get older. Roth IRAs are not subject to RMDs during your lifetime, which is why we spend as much time with retirees on where assets sit across accounts as on how much they’ve saved.
How Do RMDs Affect Your Tax Bracket and Medicare Premiums?
Because RMDs count as ordinary income, a large distribution can push you into a higher bracket in a single year, even if your spending hasn’t changed. The effect can extend beyond income tax. Medicare’s income-related monthly adjustment amount, or IRMAA, uses your tax return from two years earlier to set your Part B and Part D premiums. For 2026, that surcharge begins once modified adjusted gross income (MAGI) crosses $109,000 for single filers or $218,000 for joint filers, and it works as a cliff rather than a gradual increase. Cross the line by a dollar and you owe the full surcharge for that tier, which can add well over $2,000 a year for a couple. An RMD that lands you just over a threshold is an expensive way to find that out after the fact.
Should You Consider Roth Conversions in the Gap Years Before RMDs Begin?
The years between retirement and age 73 are often the best window you’ll have to manage Roth conversions. Income tends to drop once paychecks stop, which can open room in lower brackets before Social Security and RMDs layer on top. Converting a portion of a traditional IRA to a Roth during these gap years, the bracket-filling approach we’ve described before, means paying tax on the conversion now, at a rate you can see and plan around, in exchange for smaller mandatory withdrawals and less taxable income later. Because IRMAA looks back two years, a conversion sized without that in mind can raise your Medicare premiums well before it lowers a future RMD, so the amount converted is worth weighing against your IRMAA room as much as your tax bracket.
How Does a Qualified Charitable Distribution Reduce Your RMD Tax Bill?
If giving is part of your plan, a qualified charitable distribution is worth a close look. Once you reach 70½, you can direct funds straight from your IRA to a qualifying charity, up to $111,000 per individual in 2026, and that amount is excluded from your taxable income entirely. It isn’t a deduction you have to itemize to claim; it simply never counts as income in the first place. For anyone taking RMDs, a QCD can satisfy some or all of that year’s requirement while keeping your MAGI, and your Medicare premiums, lower than they’d otherwise be.
How Do You Turn RMD Rules Into a Year-by-Year Plan?
RMDs aren’t a single decision made once at 73. They’re an ongoing part of the income plan you build for retirement, deserving the same year-by-year attention as everything else in it, from how much to convert in the gap years to how a QCD fits alongside your giving goals. In practice, that often means modeling withdrawals several years out and pulling a steady, planned amount each year rather than letting RMDs stack on top of Social Security or other income in any single year and pushing that one year’s tax bill higher than it needs to be.
Our tax planning work is built around exactly this kind of multi-year coordination, and it’s central to how we guide clients through retirement, because at WealthCrossing, we believe it is always tax time.
If you’d like to talk through how RMDs will shape your own tax bracket in the years ahead, we’re ready to start that conversation.
