RMDs in Your 70s: Three Tax Choices Worth Reviewing

Taking required minimum distributions (RMDs) on time is only one part of retirement tax planning. The way you handle the money afterward can affect whether charitable gifts provide a tax benefit, how much of your Social Security is taxable and what tax bills a surviving spouse may face.

Consider Jim and Mary, a couple in their 70s who were withdrawing their full RMD each January and giving away $10,000 a year. They kept records of their donations and assumed they would claim a charitable deduction. But they didn’t itemize deductions, so the gifts gave them no deduction. The adviser who reviewed their situation estimated they missed $2,200 in tax savings in both 2021 and 2022.

Their experience points to three decisions that retirees can review together: when and how they take RMDs, whether Roth conversions still fit their plans, and how they route charitable gifts.

1. Fit RMDs into the rest of your plan

Jim and Mary were diligent about calculating and taking their distributions. They called their previous adviser each January, sent the money to their bank account and gave it away later in the year. That routine helped them avoid missing a distribution, but it didn’t account for the tax effects of the withdrawals or their donations.

An RMD is a required withdrawal, but it doesn’t have to be treated as a stand-alone task. It can be considered alongside charitable giving, tax withholding and other retirement decisions. For someone who gives to eligible charities, a qualified charitable distribution (QCD) may allow an IRA custodian to send money directly to a charity. The distribution is excluded from the donor’s taxable income and counts toward the RMD.

That can matter when a retiree doesn’t itemize deductions. A donation made with money that has already gone into a bank account generally can’t later be treated as a QCD. The route and timing of the gift affect its tax treatment.

For retirees who need the distribution to cover expenses, donating the full RMD may not make sense. Some may instead consider whether withholding taxes from an RMD is a better fit than making estimated payments. The right approach depends on the household’s cash needs, income and tax circumstances.

2. Don’t assume Roth conversions stop at RMD age

There’s no age cutoff for converting eligible traditional IRA funds to a Roth IRA, and starting RMDs doesn’t automatically rule out a conversion. A conversion can be worth examining if projections suggest it could lower total taxes for the account holder, a surviving spouse or heirs. Age alone doesn’t settle that question.

There are important sequencing requirements once RMDs begin: the RMD itself can’t be converted, and it must be taken before any Roth conversion for the year. A conversion also has tax consequences, so the amount should be considered in the context of the household’s broader income and tax picture.

Jim and Mary’s situation shows why the possible future tax position of a spouse can matter. Jim was a retired pastor. If he died first, Mary would continue receiving the same pension amount, but it would be fully taxable rather than nearly tax-free. After making sure Jim met his RMD obligation, the couple worked out an annual Roth conversion amount intended to build Roth savings for Mary. Future withdrawals would still have to meet Roth distribution requirements.

A conversion isn’t automatically beneficial. Its value depends on the taxes paid now, the tax treatment of future withdrawals and the household’s circumstances over time. A plan should account for the RMD first, then weigh any conversion against those factors.

3. Check whether charitable gifts actually lower your taxes

Jim and Mary’s gifts were generous, but their recordkeeping didn’t create a deduction by itself. They gave after the RMD had reached their bank account, which meant they couldn’t count those gifts as QCDs. And because they weren’t itemizing, their donations weren’t producing the charitable deduction they expected.

There can be other effects when an RMD is included in taxable income. It may cause more Social Security benefits to be taxable. The source also notes that in 2026, additional income could affect eligibility for part of an enhanced senior deduction. Those effects depend on the person’s circumstances, so retirees should look at the combined tax impact rather than assessing a donation in isolation.

A charitable deduction for people who don’t itemize is available in 2026, up to $1,000 for single taxpayers and $2,000 for married couples filing jointly. Those limits may not cover a household’s full annual giving. Jim and Mary donated $10,000 a year, far more than the amounts described for that deduction.

The standard deduction can also make it easy to overestimate the tax value of charitable gifts. Keep donation records, but also check whether the gifts qualify for a deduction under the filing approach you use. If considering a QCD, confirm the eligible charity and arrange for the IRA custodian to send the funds directly.

Make the decisions as a set

RMDs, conversions and giving can each be sensible choices. The trouble starts when they’re handled separately, without checking how one affects the others. A withdrawal can add taxable income; a later donation may not undo that effect; and a spouse’s tax position may change in the future.

Retirees can use a yearly review to connect these decisions. Start by confirming the RMD amount and timing. Then consider how much of the distribution the household needs, whether any portion may be given directly to an eligible charity, and whether tax withholding or estimated payments fit the cash-flow plan. If a Roth conversion is under consideration, satisfy the RMD first and assess the conversion’s tax cost against its potential longer-term value.

Tax planning doesn’t end when RMDs begin. The required withdrawal sets a minimum; it doesn’t make the decisions about charitable gifts, withholding or conversions. Coordinating those choices can help retirees understand what their money is doing now and prepare for how their tax circumstances may change.