How to Avoid Taxes on RMDs in 2026: 7 Proven Strategies
Required minimum distributions (RMDs) have a way of arriving at the worst possible time. You’ve spent decades building a retirement account, and then the IRS requires you to pull money out whether you need it or not, adding it straight to your taxable income just when you thought you had things under control.
The good news: “avoid” doesn’t have to mean “impossible.” With the right planning, you can legally reduce, defer, or redirect the tax hit from your RMDs. Here are seven strategies worth knowing in 2026.
Why RMDs Create a Tax Problem
When you take an RMD from a traditional IRA or 401(k), that distribution counts as ordinary income. It stacks on top of Social Security, pensions, investment income, and anything else you’re drawing. That combination can push you into a higher bracket, trigger Medicare IRMAA (Income-Related Monthly Adjustment Amount) surcharges, or increase the taxable portion of your Social Security benefits.
The issue isn’t just the tax rate. It’s what an unplanned distribution does to your entire tax picture for the year.
Understanding the New RMD Age Rules
The rules surrounding required minimum distributions have changed significantly in recent years, making it more important than ever to know exactly when your withdrawals must begin.
Under the SECURE 2.0 Act, the RMD age increased from 72 to 73 beginning in 2023. That age will remain in effect through 2032. Starting in 2033, the RMD age increases again to 75 for individuals born in 1960 or later.
Here’s how the current rules apply:
- Born 1951-1959: Your RMDs begin at age 73.
- Born 1960 or later: Your RMDs begin at age 75.
How to Avoid Taxes on RMDs: 7 Strategies
1. Convert to a Roth IRA Before RMDs Begin
Roth IRAs have no RMD requirements during your lifetime. Convert traditional IRA funds to a Roth before age 73, and those assets grow tax-free with no mandatory withdrawals attached.
The catch is that conversions are taxable in the year you make them. The strategy works best when done gradually — converting enough each year to fill your current bracket without jumping into the next one. The years between retirement and age 73 are often the ideal window to make this move.
2. Use a Qualified Charitable Distribution (QCD)
A QCD lets you transfer up to $111,000 per person directly from your IRA to a qualified charity in 2026. That amount counts toward your RMD but is excluded from your taxable income entirely.
It’s one of the most efficient tools available. You satisfy the RMD requirement, support a cause you care about, and pay zero tax on that portion of the distribution without needing to itemize deductions to benefit.
QCDs are only available if you’re 70½ or older, and the transfer must go directly from the IRA custodian to the charity.
3. Delay Your First RMD Strategically
Your first RMD is due by April 1 of the year after you turn 73. However, delaying that first distribution means you’ll also need to take your second RMD by December 31 of the same year. While delaying your RMD may seem appealing, the extra tax, higher Medicare premiums, or increased taxation of your Social Security benefits can outweigh the advantage.
In some situations, that tradeoff makes sense. If you expect a lower income the following year — a business sale closing, a one-time deduction, or a change in filing status — bunching two distributions into that year might actually reduce your total tax. This takes careful projection, not guesswork. That’s why it’s important to begin tax planning several years before your first RMD is due.
4. Keep Working and Delay Your 401(k) RMD
Still employed at 73 and own less than 5% of the company? You may be able to delay RMDs from your current employer’s 401(k) until you actually retire. This doesn’t apply to IRAs or old 401(k)s from previous employers, but it can buy meaningful time to plan.
Some people roll old 401(k) balances into their current employer’s plan specifically to take advantage of this rule.
5. Consider a Qualified Longevity Annuity Contract (QLAC)
A QLAC is a deferred income annuity purchased inside a retirement account. In 2026, you can invest up to $210,000 of your IRA or 401(k) balance in a QLAC, and that portion is excluded from your RMD calculation until the annuity begins paying out, which can be deferred as late as age 85.
That reduces your near-term RMD amount. The tradeoff is committing those funds to a fixed income stream starting at a future date. It’s not the right fit for everyone, but if you want to reduce early RMDs while securing guaranteed income later, it’s worth modeling.
6. Aggregate RMDs Across Multiple IRAs
If you have multiple traditional IRAs, you must calculate an RMD for each one — but you can take the total combined amount from any single account or combination of accounts. That gives you flexibility to pull from whichever account has the lowest growth potential or fits best within your broader portfolio strategy.
The same aggregation rule applies to 403(b) accounts. It does not apply to 401(k)s, where each account must satisfy its own RMD separately.
7. Pair a QCD with Appreciated Securities from a Taxable Account
Donating appreciated stock or mutual funds directly to a donor-advised fund or charity doesn’t satisfy an RMD on its own, but it frees up cash you might otherwise have donated. That freed cash can then absorb the tax cost of a larger Roth conversion or be reinvested in a more tax-efficient way.
Combining a QCD from your IRA with a charitable gift of appreciated securities from a taxable account is a coordinated move that reduces your overall tax bill from multiple angles at once.
The Bigger Picture: Coordination Matters
None of these strategies works in isolation. A Roth conversion that looks smart on paper might push you into a higher Medicare premium bracket. A QCD that lowers your taxable income might interact with your Social Security calculation in ways you didn’t anticipate.
RMD planning isn’t a one-time decision. It’s an ongoing part of your tax and retirement strategy, and it works far better when all your financial information lives in one place and is reviewed by one team that sees the full picture.
At Korhorn Financial Group, CFP®-certified advisors work through the OnePlan process to coordinate your RMD strategy alongside your tax planning, investment management, and income needs. The goal isn’t just a lower tax bill this year. It’s a lower lifetime tax burden.
Start Planning Before the Deadline
RMD tax planning is most effective when it starts years before the distributions are required. The window between retirement and age 73 is often the best time to run Roth conversions, model QCD strategies, and coordinate your overall income plan.
If you’re approaching that window or already taking RMDs and want a clearer picture of your options, schedule a meeting to work through the numbers with a CERTIFIED FINANCIAL PLANNER™.
Frequently Asked Questions
You can’t avoid them from traditional IRAs and most employer plans once you reach age 73, but you can reduce their size through Roth conversions before that age and offset the tax impact through strategies like QCDs and QLACs.
Yes. A qualified charitable distribution from an IRA counts toward your RMD for the year. The amount transferred directly to charity is excluded from your taxable income, which is the primary tax benefit.
The QCD limit is $111,000 per person per year in 2026. Married couples can each make QCDs up to that amount from their own IRAs, provided each spouse has an eligible IRA.
Your RMD age depends on your year of birth. If you were born between 1951 and 1959, your RMDs begin at age 73. If you were born in 1960 or later, your RMDs begin at age 75. Your first RMD is generally due by April 1 of the year following the year you reach your required beginning age.
Yes. Once you take the distribution and pay the applicable taxes, you can reinvest the after-tax amount in a taxable brokerage account. You cannot put it back into a tax-deferred account.
Roth IRAs are not subject to RMDs during the original owner’s lifetime. Converting traditional IRA funds to a Roth eliminates future RMDs on those converted amounts, though the conversion itself is taxable in the year it occurs.
Missing an RMD triggers a penalty equal to 25% of the amount you should have withdrawn. Correct the mistake in a timely manner, and that penalty may drop to 10%. The IRS has a correction process, but it’s far better to plan ahead and avoid the situation entirely.
Brendon Handy is a CERTIFIED FINANCIAL PLANNER™ at Korhorn Financial Group. He also holds his Chartered Financial Consultant (ChFC®) and Enrolled Agent (EA) designations.
