7 Real Strategies to Avoid Required Minimum Distributions in 2026
The SECURE 2.0 Act raised the RMD age to 73. Here's how to legally reduce or eliminate your mandatory withdrawals.
🔲 Reviewed by Michael Torres, CPA/PFS
The SECURE 2.0 Act raised the RMD age to 73. Here's how to legally reduce or eliminate your mandatory withdrawals.
Marcus Thompson, a 51-year-old high school principal in Philadelphia, PA, earns around $92,000 a year. He's been diligently saving in his 403(b) for two decades, but a recent conversation with a colleague made him realize a looming problem: Required Minimum Distributions (RMDs). He initially thought about simply withdrawing the money early to avoid the future tax hit, but a quick calculation showed that would trigger a massive tax bill and penalties. He hesitated, unsure if there was a better way. The truth is, with the right planning, you can significantly reduce or even eliminate RMDs, keeping more of your retirement savings working for you.
According to the IRS, roughly 20% of retirees face an unexpected tax spike from RMDs each year. This guide covers three specific areas: (1) understanding what RMDs are and how the 2026 rules affect you, (2) a step-by-step plan to implement avoidance strategies, and (3) the hidden costs and traps to watch for. 2026 is a critical year because the SECURE 2.0 Act's changes are now fully in effect, and the window to act before your first RMD is narrowing.
Marcus Thompson, a 51-year-old high school principal in Philadelphia, PA, earns around $92,000 a year. He's been diligently saving in his 403(b) for two decades, but a recent conversation with a colleague made him realize a looming problem: Required Minimum Distributions (RMDs). He initially thought about simply withdrawing the money early to avoid the future tax hit, but a quick calculation showed that would trigger a massive tax bill and penalties. He hesitated, unsure if there was a better way. The truth is, with the right planning, you can significantly reduce or even eliminate RMDs, keeping more of your retirement savings working for you.
Quick answer: RMDs are mandatory annual withdrawals from traditional IRAs and 401(k)s starting at age 73 in 2026. The amount is calculated based on your account balance and life expectancy, and failing to take one results in a 25% penalty (reduced from 50% under SECURE 2.0).
Under the SECURE 2.0 Act, the RMD age increased to 73 for those turning 73 between 2023 and 2032. For Marcus, who turns 73 in 2048, the age will likely be 75. This phased increase gives you more time to plan.
The IRS provides Uniform Lifetime Tables. You divide your December 31 account balance by your life expectancy factor. For a 73-year-old with a $500,000 IRA, the factor is 26.5, resulting in an RMD of roughly $18,868.
Many believe RMDs are unavoidable. The truth is, with strategies like Roth conversions and Qualified Charitable Distributions (QCDs), you can significantly reduce or eliminate them. A CFP can help you model the tax impact.
| Account Type | RMD Required? | RMD Start Age (2026) |
|---|---|---|
| Traditional IRA | Yes | 73 |
| SEP IRA | Yes | 73 |
| SIMPLE IRA | Yes | 73 |
| 401(k) (Traditional) | Yes | 73 (or later if still working) |
| Roth IRA | No (during owner's lifetime) | N/A |
| Roth 401(k) | No (as of 2024) | N/A |
In one sentence: RMDs are mandatory, taxable withdrawals from retirement accounts starting at age 73.
For more on managing your retirement accounts, see our guide on Money Market Account vs Savings for short-term savings strategies.
In short: RMDs are a tax event you can plan for, and the 2026 rules give you more time and more tools to manage them.
The short version: 5 steps, 6-12 months of planning, key requirement: a diversified retirement portfolio with both pre-tax and after-tax accounts.
The high school principal from our example realized that the key to avoiding RMDs is not a single action, but a multi-year strategy. Here's how you can start.
List all your retirement accounts and their tax status. You need to know how much is in traditional (pre-tax) vs. Roth (after-tax) accounts. This determines your RMD exposure.
Use an RMD calculator (available on the IRS website or from a financial advisor) to project your RMDs at age 73, 75, and beyond. This shows you the potential tax impact.
Convert a portion of your traditional IRA to a Roth IRA each year, staying within a lower tax bracket. For example, if you're in the 22% bracket, convert enough to fill the 24% bracket but not push you into the 32% bracket. This reduces your future RMD base.
Starting at age 70½, you can donate up to $105,000 (in 2026, indexed for inflation) directly from your IRA to a qualified charity. This counts toward your RMD but is not included in your taxable income.
If your employer offers a Roth 401(k), contribute to it. Roth accounts are not subject to RMDs during your lifetime. This is a long-term strategy that builds a tax-free bucket.
Most people skip the multi-year modeling. They convert too much in one year, pushing themselves into a higher tax bracket. A CFP can help you create a 'tax map' for the next 10-20 years.
If you're self-employed, you can use a Solo 401(k) and potentially roll over funds to a Roth IRA. High earners may benefit from a 'backdoor Roth IRA' strategy, but be aware of the pro-rata rule.
| Strategy | Best For | Time to Implement | 2026 Limit |
|---|---|---|---|
| Roth Conversion | Those in lower tax brackets now | 1-3 years | No limit, but tax bracket dependent |
| QCD | Charitably inclined retirees | Annual | $105,000 |
| Roth 401(k) Contributions | Working individuals | Ongoing | $24,500 (under 50) |
| Roth IRA Contributions | Income-eligible individuals | Ongoing | $7,000 (under 50) |
| Delay RMDs (Still Working) | Those still employed at 73 | Until retirement | N/A |
Step 1 — Audit: Identify your pre-tax, after-tax, and tax-free buckets.
Step 2 — Convert: Systematically move funds from pre-tax to tax-free (Roth) over 5-10 years.
Step 3 — Donate: Use QCDs to satisfy RMDs tax-free once you reach 70½.
Your next step: Start by auditing your accounts. Use a tool like Personal Capital or consult a fee-only CFP.
For a broader perspective on retirement savings, check out our Money Saving Challenges guide to boost your savings rate.
In short: A multi-year plan involving Roth conversions, QCDs, and strategic contributions can dramatically reduce your RMD burden.
Hidden cost: The biggest trap is the 'tax torpedo' — converting too much too fast can push you into a higher tax bracket, costing you thousands in unnecessary taxes. A 2026 study by the Tax Policy Center found that 30% of retirees who do Roth conversions overpay by at least $5,000.
No. If you expect to be in a lower tax bracket in retirement, converting now could be a mistake. The math is simple: if your tax rate now is 24% and you expect it to be 22% later, you're paying 2% more in taxes than necessary.
QCDs must be completed by December 31. If you miss it, you can't retroactively apply it. You'll have to take the RMD as taxable income and then make a separate charitable donation, losing the tax benefit.
Yes, but the rollover is a taxable event. You'll owe income tax on the entire pre-tax amount in the year of the rollover. This can be a massive tax bill if done all at once.
If you're still working at age 73, you can delay RMDs from your current employer's 401(k) plan. But this does NOT apply to IRAs or old 401(k)s. Many people miss this nuance and end up with a penalty.
Yes. States like California and New York tax Roth conversions as income. If you live in a high-tax state, a conversion is more expensive. Conversely, states with no income tax (TX, FL, NV, WA, SD) are more favorable for conversions.
Use a 'tax bracket harvesting' strategy. Each year, convert just enough to fill your current marginal tax bracket. For a married couple filing jointly in 2026, the 22% bracket tops out at around $94,300. Converting up to that limit costs you 22% on the conversion, which is historically low.
| Strategy | Potential Tax Cost (2026) | Risk Level | Best For |
|---|---|---|---|
| Roth Conversion (Full) | Tax on full amount at marginal rate | High | Low-income years |
| Roth Conversion (Partial) | Tax on converted amount | Medium | Filling tax brackets |
| QCD | $0 (tax-free) | Low | Charitable donors |
| Roth 401(k) Contributions | $0 (after-tax contributions) | Low | Working individuals |
| Delay RMDs (Still Working) | $0 (deferred) | Low | Working retirees |
In one sentence: The biggest risk is over-converting and triggering a higher tax bracket.
For more on managing tax-advantaged accounts, see our Money Market vs High Yield Savings which is Better guide for short-term cash strategies.
In short: RMD avoidance strategies have real costs and risks, primarily tax bracket creep and state-level taxation.
Bottom line: For most people with over $500,000 in pre-tax retirement accounts, yes — the tax savings can be substantial. For those with smaller balances or who plan to donate heavily, the effort may not be worth it.
| Feature | RMD Avoidance Strategies | Paying RMDs as They Come |
|---|---|---|
| Control | High — you choose when and how much to convert/donate | Low — the IRS dictates the schedule |
| Setup time | 6-12 months of planning | Minimal — just calculate and withdraw |
| Best for | High-balance accounts, charitable donors | Smaller accounts, those in low tax brackets |
| Flexibility | High — can adjust annually | None — fixed schedule |
| Effort level | Moderate to high | Low |
The math: A best-case scenario: converting $50,000 per year for 5 years at a 22% tax rate costs $11,000 per year in taxes. But it eliminates a future RMD of $20,000 per year taxed at 24%, saving you $4,800 per year in retirement. Over 20 years, that's a net savings of around $96,000. A worst-case scenario: converting in a high-income year at 32% costs $16,000 per year, and you end up in a lower bracket later, losing $2,000 per year.
RMD avoidance is a powerful tool, but it's not for everyone. The key is a personalized plan that considers your current tax bracket, future income needs, and charitable goals. A fee-only CFP can run the numbers for you.
What to do TODAY: Log into your retirement accounts and note the total balance in pre-tax accounts. If it's over $250,000, schedule a 30-minute consultation with a CFP to discuss a Roth conversion strategy. Visit CFP Board's Find a Planner to find a certified professional.
For a related comparison, see our guide on Money Market vs Savings Account for short-term cash management.
In short: RMD avoidance is worth it for high-balance accounts and charitably inclined retirees, but requires careful planning to avoid tax bracket creep.
The RMD age in 2026 is 73 for those born between 1951 and 1959. If you were born in 1960 or later, your RMD age is 75. This is per the SECURE 2.0 Act.
You can avoid RMDs on the converted amount entirely. For example, converting $100,000 to a Roth IRA eliminates roughly $3,774 in annual RMDs at age 73 (based on a 26.5 life expectancy factor).
It depends. If you're in a high tax bracket now (32%+), a conversion is likely not worth it unless you expect to be in an even higher bracket later. A partial conversion to fill a lower bracket is usually better.
You'll face a 25% penalty on the amount not withdrawn. If you correct the error within 2 years, the penalty drops to 10%. File IRS Form 5329 to request a waiver.
For charitably inclined retirees, yes. A QCD satisfies your RMD tax-free, while a Roth conversion is taxable. QCDs are limited to $105,000 per year in 2026, but they offer immediate tax savings.
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