Why RMD Planning Should Start Before You Are 73

June 23, 2026

Many successful retirees spend decades building wealth inside tax-advantaged retirement accounts. 

Then, at age 73, the conversation changes. 

Required Minimum Distributions (RMDs) force account owners to begin withdrawing assets from certain retirement accounts, whether they need the income or not. While these rules are designed to ensure retirement savings are eventually taxed, they can create unintended consequences for affluent individuals and families. 

Larger distributions may increase taxable income, trigger higher Medicare premiums, impact the taxation of Social Security benefits, and affect broader estate and wealth transfer goals. 

The challenge is not simply complying with RMD requirements. 

It’s ensuring those distributions fit within a broader tax, retirement, and legacy strategy. 

For many families, the most effective RMD planning begins years before the first required distribution. 

RMDs Are More Than a Retirement Income Issue 

Many retirees view RMDs as a retirement income requirement. 

In reality, they are often a tax planning challenge. 

The size of a required distribution is determined by account balances and IRS life expectancy tables—not by your spending needs. 

As a result, some affluent retirees find themselves taking distributions they do not need for lifestyle expenses, potentially creating additional tax exposure without providing meaningful financial benefit. 

This is particularly common among individuals who have accumulated significant assets in traditional IRAs or employer-sponsored retirement plans. 

The question becomes: 

How can required distributions be managed in a way that supports broader financial objectives? 

Several planning strategies may help improve flexibility and reduce unnecessary tax burdens when implemented thoughtfully and in coordination with an overall wealth plan. 

Taking Advantage of the Pre-RMD Planning Window 

One of the most valuable planning opportunities often occurs before RMDs begin. 

For many individuals, the years between retirement and age 73 can create a temporary period of lower taxable income. Employment income may have ended, while Social Security benefits and mandatory retirement account distributions have not yet fully begun. 

This window may provide opportunities to evaluate: 

• Strategic Roth conversions 
• Intentional retirement account withdrawals 
• Tax bracket management 
• Charitable giving strategies 
• Long-term estate planning objectives 

Because future RMDs are largely driven by account balances, proactive planning during these years may help create greater flexibility later. 

In many cases, the most important RMD decisions are made before the first RMD is ever required. 

Using Qualified Charitable Distributions to Support Giving Goals 

For charitably inclined individuals, Qualified Charitable Distributions (QCDs) can provide a tax-efficient way to satisfy all or a portion of an annual RMD obligation. 

Individuals age 70½ or older may transfer eligible funds directly from a traditional IRA to a qualified charitable organization. 

When structured properly, the distributed amount is generally excluded from taxable income while still counting toward RMD requirements. 

For some families, this approach may help: 

• Reduce adjusted gross income 
• Minimize Medicare IRMAA surcharges 
• Reduce the taxation of Social Security benefits 
• Support philanthropic objectives in a tax-efficient manner 

Beyond the tax benefits, QCDs can help align retirement distribution requirements with a family’s charitable values and legacy goals. 

Strategic Roth Conversions May Reduce Future RMD Exposure 

For affluent retirees, Roth conversions are often one of the most frequently discussed RMD planning strategies. 

By converting a portion of traditional retirement assets into a Roth IRA, individuals voluntarily recognize taxable income today in exchange for potential tax-free qualified withdrawals in the future. 

Because Roth IRAs are not subject to lifetime RMD requirements for the original account owner, conversions may help reduce future distribution obligations over time. 

Potential benefits include: 

• Lower future RMDs 
• Greater tax diversification 
• Increased retirement income flexibility 
• Enhanced wealth transfer opportunities for heirs 

The effectiveness of a Roth conversion strategy depends on many factors, including current and future tax rates, overall income levels, estate planning objectives, and available assets to pay conversion taxes. 

For many families, gradual conversions executed over multiple years may provide greater flexibility than a single large conversion. 

Evaluating Qualified Longevity Annuity Contracts (QLACs) 

Some retirees may also consider a Qualified Longevity Annuity Contract (QLAC) as part of a broader retirement income strategy. 

A QLAC allows a portion of retirement assets to be allocated to a deferred income annuity that begins making payments later in retirement. 

Assets allocated to an eligible QLAC are excluded from RMD calculations until annuity payments begin. 

For certain individuals, this may help: 

• Reduce near-term taxable distributions 
• Create additional income later in retirement 
• Support longevity planning objectives 
• Improve retirement income predictability 

As with any annuity strategy, liquidity needs, overall portfolio construction, and long-term financial goals should be carefully evaluated before implementation. 

Coordinating RMD Planning with Estate and Legacy Goals 

For affluent families, RMD planning often extends beyond retirement income. 

Distribution decisions can influence estate planning strategies, charitable giving objectives, trust structures, and the after-tax wealth ultimately transferred to future generations. 

This is why RMD planning is most effective when coordinated alongside: 

• Tax planning 
• Investment management 
• Estate and trust planning 
• Philanthropic strategies 
• Multigenerational wealth transfer goals 

Viewed in isolation, an RMD is simply a required withdrawal. 

Viewed strategically, it can become part of a broader plan designed to improve tax efficiency and preserve long-term flexibility. 

The Most Important RMD Decisions Often Happen Before RMDs Begin 

Required Minimum Distributions may be mandatory, but the planning surrounding them is not. 

The most effective strategies often begin years before age 73, when individuals have greater flexibility to coordinate retirement income, tax planning, charitable giving, and long-term wealth transfer objectives. 

By taking a proactive approach, families may be able to reduce unnecessary tax exposure, improve retirement income flexibility, and better align distribution decisions with their broader financial goals. 

At First Western Trust, we believe retirement planning should be viewed within the context of your entire financial life. Through integrated wealth management, tax-aware planning, trust and estate coordination, and personalized guidance, we help clients navigate retirement decisions with clarity, confidence, and a long-term perspective. 

Trust, estate planning, insurance, and investment products are not a deposit, not FDIC insured, not insured by any federal government agency, not guaranteed, subject to investment risks, including possible loss of the principal amount invested and may go down in value. Any information and research contained herein do not represent a recommendation of investment advice to buy or sell stocks or any financial instrument nor is it intended as an endorsement of any security or investment, and it does not constitute an offer or solicitation to buy or sell any securities or investment services. This content is for informational purposes only and does not constitute legal or tax advice. Please consult your legal or tax advisor for specific guidance tailored to your situation. First Western Trust Bank cannot provide tax advice.