Strategies can lower required minimum distributions and taxes

Starting at age 73, retirees must take required minimum distributions (RMDs) from their retirement accounts, which can increase tax bills. New strategies can help reduce RMDs and taxes, including qualified charitable distributions, early withdrawals, and Roth conversions. Qualified charitable distributions allow individuals over 70½ to donate directly from their IRAs, reducing taxable income. Taking RMDs early in the year can lower future RMD amounts by decreasing account value. Roth conversions can also lower future RMDs, as these accounts are not subject to RMDs. These strategies can be combined for greater tax benefits. Individuals can use charitable distributions to meet RMDs, convert accounts to Roths, and withdraw early in the year to manage their tax liabilities effectively.