Even though Required Minimum Distributions (RMDs) don’t officially start until later in retirement, waiting until the last minute can create unintended tax and planning problems. Intentionally starting earlier often gives you more control and flexibility.
1️⃣ Taxes May Be Easier to Manage When You Spread Them Out
If you wait until RMDs begin, your required withdrawals may be large — especially if your accounts have grown over many years. That can push you into a higher tax bracket, increase Medicare premiums, and create a bigger tax bill than expected.
By taking smaller withdrawals or doing Roth conversions earlier, you can spread taxes out over time instead of facing a sudden spike later.
Think of it like easing into a pool instead of jumping straight into cold water.
2️⃣ You Control the Timing — The IRS Doesn’t
Before RMD age, you get to decide:
- How much to withdraw
- When to withdraw
- Which accounts to use
- How to manage taxes
Once RMDs begin, the IRS dictates the minimum — whether markets are up, taxes are higher, or you actually need the money or not.
Early planning keeps the steering wheel in your hands.
3️⃣ It Can Reduce Future RMDs
If you gradually reduce the size of traditional retirement accounts earlier (through withdrawals or Roth conversions), future RMDs may be smaller. Smaller RMDs often mean:
- Lower taxable income later
- Less pressure on Medicare premiums (IRMAA)
- More flexibility for charitable and legacy planning
4️⃣ It May Create More Tax-Free Flexibility Later
Moving money into Roth accounts earlier can create a pool of tax-free income later in retirement. That gives you more flexibility when:
- Big expenses pop up
- Markets are volatile
- Tax laws change
- You want to manage taxable income carefully
Flexibility is one of the most valuable things in retirement planning.
5️⃣ It May Help Avoid “Double Income” Years
If someone delays their first RMD until April 1 of the following year, they may end up taking two taxable distributions in the same year — which can unintentionally spike income and taxes.
If you would like to discuss the best way to plan your own RMDs, please contact our office. We would love to help plan a retirement that works for you.
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