Water passes through an RMD gate into a tax return basin, with ripples extending toward separate downstream areas.

Reviewing Choices Before RMDs Begin

Ross Marino |
Categories
RMD
IRA
Tax Planning
Medicare
Roth Conversions

The account statement arrives, and the balance looks steady. Retirement income may feel workable. Taxes may feel manageable. Required withdrawals are known, but they sit in the “later” category.

Then a practical question appears: what changes when money has to come out of a tax-deferred account, whether it is needed for spending or not?

That question matters because required minimum distributions are not only an IRS deadline. They can become future taxable income. Once that income appears on the tax return, it can affect tax planning and Medicare premium planning. It can also shape Roth conversion reviews, charitable giving, and account use.[1][2]

What changes when RMDs begin?

An RMD is the minimum amount that must be taken from certain tax-deferred retirement accounts each year. Under current IRS guidance, owners of traditional IRAs, SEP IRAs, and SIMPLE IRAs generally must begin RMDs after reaching age 73. The first deadline is usually April 1 of the year after that birthday year. Some workplace plans may allow a later start date for people who are still working.[1]

After the first required year, RMDs generally must be taken by December 31. The amount is usually calculated using the prior year-end account balance and an IRS life expectancy distribution period. The withdrawal is generally included in taxable income, except for basis or amounts that are otherwise tax-free.[1]

A tax-deferred account allowed tax to be postponed while the money was saved or invested. Later, withdrawals from traditional tax-deferred accounts are generally taxable. That is why an IRA balance that feels like a future resource can also represent future taxable income.[2]

Why review before the first required year?

Before RMDs begin, a household may have more control over how much taxable retirement account income is reported in a given year. That does not mean income should always be accelerated or avoided. It means the timing window is worth reviewing before required withdrawals add another income source to the return.[1][3]

This is especially relevant for Roth conversion reviews. A Roth conversion can create taxable income in the year it is completed. The review should compare that income with expected future tax circumstances and future RMDs. Conversion size, residence, and workplace plan rules may also matter. Legacy goals may too.[3][4]

Once RMDs apply for a year, the required amount generally must be taken before additional amounts are converted to a Roth IRA. That sequencing rule can make later planning less flexible.[3][4]

Dovetail Principle: Timing Can Change Which Options Remain

Pre-RMD planning is a timing review, not a rush. The useful question is what may be easier to review while withdrawals are still optional, and which choices may become harder to adjust once required income begins.

 

What can future taxable income affect?

One area is Medicare. Some Medicare beneficiaries pay an income-related monthly adjustment amount, often called IRMAA. It can apply to Parts B and D. IRMAA applies only when income exceeds the relevant thresholds, so an RMD does not automatically result in higher premiums. Still, Medicare premium planning can be connected to taxable income planning for retirees.[5][3]

The connection can be easy to miss. The RMD comes from a retirement account, but IRMAA appears later as Medicare premiums. A withdrawal can change what shows up on a tax return. That tax return can then affect a future premium determination.[5]

Retirement income planning is another area for review. Required withdrawals may not match what a household wants or needs to spend. Research has examined RMD-based withdrawals as one possible spending framework, but it is only one. A required distribution may differ from the income plan a retiree would have chosen without the rule.[6]

How can giving and account use fit in?

For charitably inclined households, qualified charitable distributions may become relevant. A QCD is generally connected to IRA assets. It is not generally connected to workplace retirement accounts such as 401(k), 403(b), or 457(b) plans. That makes the account location part of the review before the giving year arrives.[7]

This does not mean rolling a workplace plan to an IRA is always appropriate. Rollovers can affect investment choices and costs. Creditor protections, services, and plan features may also change. The narrower point is that charitable giving methods can depend on where retirement assets are held.[7]

The withdrawal order also deserves review. Households with both traditional and Roth IRAs may draw from accounts in ways that do not fully reflect the different tax treatment of those accounts. That difference can matter when deciding which account to use for spending, tax planning, or future flexibility.[8][2]

What should be reviewed before choices are narrowed?

A useful pre-RMD review need not start with a tactic. It can start with a map of future income. Estimate what required withdrawals could add to taxable income. Then review whether that income may affect Medicare premiums and the timing of Roth conversions. Charitable giving methods and the use of traditional versus Roth accounts may also need to stay in view.[1][5][4][7][8]

Inherited IRA rules are related, but they should not take over this review unless inherited accounts are part of the actual situation. The main question here is about the original owner’s own tax-deferred retirement accounts and how future required withdrawals may change.[1]

For broader context on how tax timing fits with retirement income and Medicare costs, see Retirement Tax Planning.

The responsible next step is not to treat RMDs as a problem to avoid. It is to ask how the required future income could be affected. Before RMDs begin, review what may be easier while timing is still more flexible.[1][5][3][7][8]

Related Reading: NIIT, IRMAA, RMDs: Why Tax Decisions Need a Multi-year Plan. A broader look at why income decisions may need to be reviewed across more than one tax year.

About the author

Ross Marino, CFP®, CeFT®, is the Founder & CEO of Dovetail Financial and creator of Human-First Financial Guidance®. He helps people nearing or living in retirement connect their lives and wealth so that financial decisions become clearer, more personal, and easier to navigate.

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Notes

  1. Retirement topics - Required minimum distributions (RMDs). Internal Revenue Service. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds
  2. American Retirement and Tax-Preferred Savings Accounts, Tax Year 2018. Tax Foundation. https://taxfoundation.org/data/all/federal/401k-ira-retirement-savings-accounts/
  3. Can Converting to a Roth IRA Reduce Future RMDs?. Morningstar. https://www.morningstar.com/retirement/can-converting-roth-ira-reduce-future-rmds
  4. Roth IRA conversion: 7 things to know. Fidelity Investments. https://www.fidelity.com/viewpoints/retirement/roth-ira-conversion-after-50
  5. Medicare IRMAA: Increased Medicare Part B and D Premiums Based on Income. National Council on Aging. February 19, 2026. https://www.ncoa.org/article/medicare-irmaa-increased-medicare-part-b-and-d-premiums-based-on-income/
  6. Can Retirees Base Wealth Withdrawals on the IRS’ Required Minimum Distributions?. Center for Retirement Research at Boston College. October 16, 2012. https://crr.bc.edu/can-retirees-base-wealth-withdrawals-on-the-irs-required-minimum-distributions/
  7. A way to give to charity that can help reduce taxes. Vanguard. https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/way-give-charity-help-reduce-taxes.html
  8. Withdrawal Activity of Individuals Owning Both Traditional and Roth Individual Retirement Accounts. Employee Benefit Research Institute. https://www.ebri.org/content/withdrawal-activity-of-individuals-owning-both-traditional-and-roth-individual-retirement-accounts

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