Once retirees reach age 73 (as per the latest SECURE Act changes), they must start taking Required Minimum Distributions (RMDs) from tax-deferred accounts such as 401(k)s and traditional IRAs. Failure to comply can result in hefty penalties. Understanding and managing RMDs is important to maintaining tax efficiency and financial stability. Credent’s advisory team is well-equipped to help clients plan for and meet this requirement. In this article, we discuss three RMD tax strategies to consider.   

1. Understand how to take your RMDs without unnecessary tax burdens

The IRS provides a formula for RMD calculations based on life expectancy and account balances. Here’s how to approach these withdrawals:

•  Use the IRS Uniform Lifetime Table (or a related resource): Find the appropriate distribution factor based on age and apply it to the account balance at year-end.¹ 
• Plan for Taxes: RMDs are treated as ordinary income and may push retirees into a higher tax bracket. Prepare accordingly.
• Talk to an Expert: Collaborate with a financial professional to strategize when to take your RMD and what to do with the money you withdraw. If you work with Credent, we’ve likely discussed your RMDs and may have helped you fulfill them already. If you’ve satisfied your RMD from investments not held with Credent, be sure to let your advisor know; excess withdrawals from outside accounts could potentially offset the amount you need to take from investments held with Credent.

2. Consider Roth conversions and other tax-efficient withdrawal strategies

Retirees can mitigate the tax impact of RMDs by considering these strategies: 

• Roth Conversions: Transferring funds from a traditional IRA to a Roth IRA can reduce future RMD obligations, as Roth IRAs are not subject to RMDs.  
• Tax Bracket Management: As mentioned previously, RMDs are treated as ordinary income. Therefore, withdraw funds strategically to avoid bumping into a higher tax bracket. An advisor can help you build RMDs into your financial plan.  
• Delaying Social Security: If possible and logical for your situation, delaying Social Security benefits allows retirees to withdraw from tax-deferred accounts earlier, reducing future RMD burdens. 

3. Use charitable giving strategies, such as Qualified Charitable Distributions (QCDs)

For charitably inclined retirees, QCDs offer a tax-efficient strategy to satisfy RMD requirements: 

• What is a QCD? Retirees can donate up to $108,000 per year directly from their IRA to a qualified charity.²  
• Tax Benefits: QCDs satisfy RMD obligations without increasing taxable income.  
• Estate Planning Considerations: In addition, charitable donations can reduce estate taxes and leave a philanthropic legacy. 

By proactively planning for RMDs, leveraging tax-efficient strategies, and exploring charitable giving, retirees can minimize tax burdens and maximize their retirement wealth. 

To talk to an advisor about taking your Required Minimum Distribution or using RMD tax strategies, contact us using the form below.  

Adapted from: “Required Minimum Distributions & Tax Strategies.” FMeX. 2025. https://abm.emaplan.com/ABM/MediaServe/MediaLink?token=71906155a01c423089efaf375caa16b0  

CX Institutional, LLC d/b/a Credent Wealth Management is a Registered Investment Advisor (RIA) headquartered in Indiana with over $4.3 billion in assets under management, offering a uniquely client-centric approach to wealth management through commission-free, transparent, and impactful financial planning and investment strategies. Since its inception in 2018, Credent has grown rapidly through a combination of organic growth and strategic acquisitions focused on providing advisors with a customized, cooperative transition as they build their own succession plans. Credent’s culture creates lasting, meaningful relationships, enabling advisors to do their best work while ensuring clients can maintain their standard of living without financial worry. Credent has been recognized on multiple industry lists, including Forbes America’s Top RIA Firms since 2023, Financial Advisor Magazine’s 2025 Top 50 Fastest Growing Firms and InvestmentNews 2025 5-Star RIA Firms. For more information, visit CredentWealth.com.