For many retirees, required minimum distributions (RMDs) are only one part of retirement income planning. The timing and amount of your income can affect taxes, Medicare premiums, charitable giving, and other financial decisions.
Look Beyond Your RMD
Once RMDs are required, you generally must take a minimum amount each year from traditional IRAs and other retirement accounts. But your overall income picture may also include Social Security, pensions, investment income, annuities, part-time work, and other sources.
Consider a Qualified Charitable Distribution
If you are age 70½ or older and regularly give to charity, a qualified charitable distribution (QCD) may be worth considering. A QCD allows you to make a direct payment from an IRA to a qualifying charity. The distribution can count toward your RMD and, if requirements are met, generally isn’t included in taxable income. For 2026, the annual QCD exclusion limit is $111,000 per individual.
Don’t Overlook Roth Conversions
A Roth conversion moves money from a traditional IRA to a Roth IRA. The conversion generally creates taxable income in the year completed, but future qualified Roth distributions can be tax-free. A conversion may make sense in lower-income years, but it should be reviewed carefully because the added income can affect your tax bracket, deductions, senior deduction, Medicare premiums, and future retirement income.
Your Income Can Affect Medicare Premiums
Higher income can increase Medicare Part B and Part D premiums through the Income-Related Monthly Adjustment Amount (IRMAA). Medicare generally uses income from two years earlier to determine those premiums. This means a Roth conversion, large retirement withdrawal, or capital gain today may affect Medicare costs in a future year. For example, income recognized in 2026 generally will be used to determine IRMAA for 2028.
The Senior Deduction Is Another Factor
Taxpayers age 65 and older may qualify for an enhanced senior deduction of up to $6,000 per eligible individual. The deduction is subject to income limitations and is available whether you itemize or take the standard deduction. Additional taxable income from a Roth conversion or retirement withdrawal could reduce the amount of the deduction available, so it should be considered before making larger income decisions.
Planning Ideas to Consider
- Review all income together. Consider RMDs, Social Security, pensions, investments, and other income before deciding how much to withdraw.
- Consider whether a QCD makes sense. If you are 70 ½ or older, regularly give to charity, and don’t need the full amount of your RMD for living expenses, a QCD may be worth considering.
- Use planning tools intentionally. Roth conversions can be helpful, but the timing matters.
- Watch income-related thresholds. Larger withdrawals or conversions may affect Medicare premiums and deductions.
Bottom Line
Retirement income planning is about more than taking your RMD each year. RMDs, QCDs, Roth conversions, Social Security, investment income, Medicare premiums, and deductions should be reviewed together so you can make informed decisions today while planning for future years.
Please review Important Disclosure Information set forth in the last section of this web site.