Required minimum distributions, often called RMDs, can become an important part of retirement planning before the first withdrawal is ever due. If you are approaching your early 70s, planning ahead may help you understand how future taxable income, account withdrawals, and cash flow needs could fit together.
RMD rules are technical, but the planning idea is practical: know which accounts may require distributions, estimate when those distributions may begin, and consider how withdrawals may affect your broader tax strategy and income planning.
What Are Required Minimum Distributions?
A required minimum distribution is the minimum amount that must generally be withdrawn each year from certain retirement accounts after you reach the applicable RMD age. The rules are designed so that tax-deferred retirement savings are eventually distributed and taxed.
According to the IRS, RMDs generally apply to traditional IRAs, SEP IRAs, SIMPLE IRAs, and many employer retirement plans. Roth IRAs are not subject to RMDs during the original owner’s lifetime. Designated Roth accounts in employer plans are also not subject to lifetime RMDs under current IRS guidance.
For current rule details, readers can review the IRS required minimum distribution FAQs.
When RMDs Begin
Under current law, many individuals must begin RMDs at age 73. Some younger individuals may have a later beginning age under the phased rules that apply to those born after 1960. Because these rules can depend on birth year, account type, and employment status, it is important to confirm your specific required beginning date before making decisions.
For IRAs, your first RMD is generally due by April 1 of the year after the year you reach RMD age. Later RMDs are generally due by December 31 each year. Delaying the first RMD until the following April may result in two RMDs in one tax year, which could increase taxable income for that year.
That timing issue is one reason it can be helpful to plan before the deadline arrives.
Why Planning Before RMD Age Matters
RMDs can affect more than the balance in a retirement account. They may influence:
- Federal and state taxable income
- Medicare premium calculations for certain taxpayers
- The taxation of Social Security benefits
- Portfolio withdrawal sequencing
- Charitable giving strategies
- Roth conversion planning
- Estate planning and beneficiary decisions
The goal is not to avoid taxes altogether. In many cases, tax-deferred accounts will eventually be taxed. The goal is to understand how future withdrawals may fit into your overall retirement income plan and whether earlier planning could give you more flexibility.
Estimate Future RMDs Early
A useful first step is to estimate future RMDs before they begin. The IRS calculation generally uses the prior year-end account balance and a life expectancy factor from IRS tables. In plain language, larger tax-deferred balances can lead to larger required withdrawals.
You do not need a perfect projection to learn something useful. Even a rough estimate can help you see whether future withdrawals may be more than you need for spending. If RMDs are likely to create more taxable income than expected, it may be worth reviewing options several years in advance.
When estimating, consider:
- Traditional IRA, SEP IRA, and SIMPLE IRA balances
- 401(k), 403(b), and other employer plan balances
- Expected pension or annuity income
- Social Security timing
- Taxable investment income
- Planned charitable giving
- State income tax rules
This is also a good time to confirm that account records, beneficiary designations, and contact information are current.
Review Account Positioning Before Withdrawals Begin
Account positioning means looking at where different types of assets are held and how each account may be used in retirement. This does not mean making sudden changes or trying to predict markets. It means checking whether your portfolio structure supports the withdrawals you may need to take.
For example, an investor approaching RMD age may want to understand:
- Which accounts will need to provide required distributions
- Whether those accounts hold enough liquid assets for expected withdrawals
- How withdrawals could affect the portfolio’s allocation over time
- Whether taxable, tax-deferred, and Roth accounts each have a clear role
- Whether investment risk still fits the household’s income needs and time horizon
If a required distribution must be taken during an unfavorable time for certain investments, having a thoughtful liquidity plan may help avoid rushed decisions. The right approach depends on your full situation, including spending needs, risk tolerance, taxes, and other income sources.
Think Through Withdrawal Sequencing
Withdrawal sequencing is the order in which you use different accounts to meet spending needs. Before RMDs begin, some retirees have flexibility to choose whether to draw from taxable accounts, tax-deferred accounts, Roth accounts, cash reserves, or a combination.
A common misconception is that there is one best withdrawal order for everyone. In reality, the order may depend on current tax rates, future income expectations, unrealized gains, charitable goals, estate planning priorities, and cash flow needs.
Some households may benefit from using lower-income years to take planned withdrawals from traditional retirement accounts before RMDs begin. Others may prefer to preserve tax-deferred assets longer. The trade-offs should be reviewed with current tax projections.
Consider Tax Strategies That May Help Manage Future Exposure
Several planning strategies may be worth discussing before RMDs begin. These are not recommendations, but they are common areas to evaluate.
Partial Roth Conversions
A partial Roth conversion moves a portion of pre-tax retirement assets into a Roth IRA. The converted amount is generally taxable in the year of conversion. This may be considered in lower-income years before RMDs begin, when the tax cost may be more manageable.
Roth conversions can reduce future tax-deferred balances, which may reduce future RMDs. They can also create more flexibility later because Roth IRAs do not have lifetime RMDs for the original owner. However, conversions can increase current taxes and may affect Medicare premiums, credits, deductions, or other income-based items.
For readers who want more background, our related article, “Understanding Roth Conversions: When They May Make Sense and What to Watch For,” explains the basics of Roth conversion planning.
Qualified Charitable Distributions
A qualified charitable distribution, or QCD, allows eligible IRA owners to transfer funds directly from an IRA to a qualified charity. For those who qualify, QCDs may count toward RMDs and may exclude the distributed amount from taxable income, subject to IRS limits and rules.
QCD planning can be especially relevant for charitably inclined retirees. It requires careful execution because the distribution generally must go directly from the IRA custodian to the qualified charity.
Coordinating With Social Security and Medicare
RMD planning should be coordinated with Social Security and Medicare considerations. Higher taxable income may affect how much of your Social Security benefit is taxable. It may also affect Medicare income-related monthly adjustment amounts, often called IRMAA, which can increase premiums for certain higher-income beneficiaries.
Because these calculations use specific income measures and lookback periods, it can be helpful to model several years at once rather than reviewing only the current year.
Common Pitfalls to Avoid
RMD planning can go off track when details are missed. Common issues include:
- Waiting until the first RMD year to start planning
- Forgetting about an old IRA or employer plan
- Assuming Roth IRAs have the same RMD rules as traditional IRAs
- Delaying the first RMD without considering the impact of two RMDs in one year
- Taking the wrong amount or missing a deadline
- Overlooking state tax rules
- Failing to coordinate withdrawals with charitable giving or tax withholding
- Not updating beneficiary designations after major life changes
The IRS notes that missed RMDs may be subject to an excise tax, although the rate may be reduced if the shortfall is corrected in a timely manner. That makes accurate tracking and timely action important.
A Practical Pre-RMD Checklist
If you are within several years of RMD age, consider reviewing the following each year:
- Confirm your RMD starting age and first deadline.
- List every retirement account that may be subject to RMD rules.
- Estimate future RMD amounts using current balances.
- Review whether your investment allocation supports future withdrawals.
- Compare possible withdrawal sequences across taxable, tax-deferred, and Roth accounts.
- Discuss whether partial Roth conversions should be evaluated.
- Review charitable giving plans and potential QCD eligibility.
- Check tax withholding and estimated tax needs.
- Update beneficiary designations and estate planning documents as needed.
This type of review can support better financial planning because it connects retirement income, taxes, investments, and estate planning in one conversation.
Key Takeaway
Planning for required minimum distributions before they begin may help you better understand future taxable income, withdrawal sequencing, and account positioning. A thoughtful review can also uncover opportunities to coordinate retirement planning with tax strategy, charitable giving, and estate planning.
Consider reviewing your retirement accounts, estimated future RMDs, beneficiary designations, and expected income sources well before your first deadline. If you would like help organizing these questions around your own situation, our team would be glad to have a low-pressure conversation.
IRS, “Retirement plan and IRA required minimum distributions FAQs” 2024
IRS, “Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs)” 2025
IRS, “Retirement topics: Required minimum distributions (RMDs)” 2026
IRS, “Retirement topics: Designated Roth account” 2026
This material is provided for educational purposes only and should not be construed as personalized investment, tax, legal, or accounting advice. RMD rules, tax treatment, and retirement account requirements depend on individual circumstances and may change. Consult your tax advisor, legal counsel, and financial professional before making decisions about retirement account withdrawals, Roth conversions, charitable distributions, or other planning strategies. This article was prepared with the assistance of artificial intelligence and reviewed by our team for accuracy, clarity, and relevance before publication.