How to Reduce Your RMDs: 5 Legal Strategies for 2026

Required minimum distributions are calculated as a percentage of your tax-deferred balance — and that percentage rises every year as your IRS life expectancy divisor shrinks. At 73 you're distributing about 3.8% of your balance; by 80 it's nearly 5%; by 85 it's over 6.5%. If you have $2 million in traditional IRAs, that's $75,000–$130,000 per year in taxable income whether you need it or not. This guide covers five strategies — some available before RMDs begin, some usable after — to legally reduce the size of those distributions.

Strategy 1: Roth conversions before RMDs begin

The single most powerful long-term RMD reduction tool is converting traditional IRA balances to Roth before your RMD age. Every dollar that moves to a Roth IRA is permanently removed from the RMD calculation — Roth IRAs have no lifetime required distributions under IRC § 408A(c)(5).¹

The math is straightforward: if you convert $200,000 in the years before 73, you permanently eliminate roughly $7,500–$8,000 per year in future RMDs at the current Uniform Lifetime Table divisors — and all future growth on that $200,000 compounds tax-free without a distribution requirement.

The pre-RMD window (roughly ages 60–72): After retiring but before Social Security and RMDs begin, many people are temporarily in their lowest tax bracket since their 30s. This window is when conversions cost the least. Converting $50,000–$150,000 per year at 22–24% now is often far cheaper than taking the same amount as ordinary income at 32–37% once RMDs, Social Security, and Medicare surcharges all stack.

Key interaction: Once RMDs begin, you must take your RMD before any Roth conversion in the same year. The RMD itself cannot be rolled over or converted — but you can convert additional funds on top of the RMD. This doesn't stop conversions; it just means the RMD comes first.

Use our Roth Conversion Calculator to model the lifetime tax comparison. See the full strategy guide at Roth Conversions: The Pre-RMD Window.

Strategy 2: Qualified Charitable Distributions (QCDs)

If you're charitably inclined, QCDs are the most tax-efficient tool available once you turn 70½. A QCD is a direct transfer from your IRA to a qualifying public charity — up to $111,000 per person in 2026 — that counts toward your RMD but is excluded entirely from your adjusted gross income.²

Why this beats a charitable deduction: A normal charitable contribution gives you a deduction against income — but only if you itemize, and subject to AGI phase-outs. A QCD skips income entirely. It never appears on line 4b of your 1040 as taxable income. That difference matters because AGI drives IRMAA tiers, Social Security taxation (the provisional income formula), and state income tax in many states.

QCDs are available from age 70½ regardless of when your RMDs start — you can use them to reduce your IRA balance (and future RMDs) for years before you're required to distribute anything. One-time QCDs to charitable remainder trusts or charitable gift annuities are available up to $53,000 (2026, also inflation-indexed).²

See our QCD Rules Guide and QCD Calculator for the full analysis including IRMAA cliff avoidance.

Strategy 3: Qualified Longevity Annuity Contract (QLAC)

A QLAC is a deferred income annuity purchased inside a traditional IRA or 401(k) that does something no other investment vehicle does: it removes the premium from the RMD calculation base while that money is in deferral.³

How it works: Under Treasury Regulations § 1.401(a)(9)-6(q) and SECURE 2.0 § 202, you can allocate up to $210,000 of your traditional IRA balance into a QLAC (2026 limit, inflation-indexed).⁴ That $210,000 is excluded from your year-end IRA balance when calculating RMDs — from the year of purchase until the QLAC begins paying income. Payments must start no later than age 85.

When payments begin: You elect an income start date at purchase — anywhere from the year you turn 72 to age 85. The longer you defer, the larger the monthly payment when it starts, because the insurance company has use of the premium longer and factors in mortality. At 75 paying into a QLAC starting at 85: a typical $210,000 premium might produce $3,000–$4,500/month in guaranteed income for life, depending on insurer and rates.

SECURE 2.0 changes (effective 2023): Before SECURE 2.0, QLACs were capped at the lesser of $145,000 or 25% of account balance. SECURE 2.0 eliminated the 25% rule and raised the dollar cap, making QLACs viable even for people with the majority of their retirement savings in one account.

Tradeoffs to weigh:

• Illiquidity. QLAC premiums are irrevocable. Once the money goes in, it is not available for withdrawal — only the income stream when payments begin. This is the primary drawback.
• Insurance company risk. QLACs are insurance products. If the issuer fails, state guaranty association coverage applies (varies by state, typically $250,000).
• Opportunity cost. If your IRA earns 7% per year and the QLAC returns 5–6% equivalent over the deferral period, you're leaving growth on the table. This depends heavily on the rate you lock in and the income start date.
• Best fit: Retirees who (a) have more income than they need from the RMD, (b) have other liquid assets for emergencies, (c) want guaranteed income starting in their 80s when investment management becomes harder, and (d) are comfortable with the illiquidity in exchange for RMD relief now and longevity insurance later.

QLACs are issued by life insurance companies. A fee-only advisor can model whether the break-even timeline and guaranteed income fit your specific situation — including the IRMAA and tax bracket implications of the RMD reduction.

Strategy 4: The still-working exception and reverse rollover

If you're still actively employed at age 73 or older, you may be able to delay RMDs from your current employer's retirement plan under IRC § 401(a)(9)(C)(ii) — but only if you own less than 5% of the company.⁵ This is covered in detail in our RMD Starting Age Guide.

The less-known extension of this strategy: the reverse IRA rollover. If your current employer's 401(k) plan accepts incoming rollovers (most large-employer plans do), you can roll your traditional IRA balance into the 401(k). Because the still-working exception covers the current employer plan, that money also becomes shielded from RMDs while you remain employed.

Limitations:

• The plan document must allow incoming rollovers — check with your HR or plan administrator.
• SEP IRAs and SIMPLE IRAs have specific rollover rules; confirm eligibility before initiating.
• This doesn't eliminate RMDs permanently — it defers them to your retirement date.
• You cannot roll a current-year RMD into another plan; the RMD must be taken first in the year of separation.

Strategy 5: Strategic withdrawal sequencing to slow RMD growth

RMDs grow because the balance grows faster than distributions are taken. If you're spending from your portfolio in retirement, the order in which you draw down account types determines how fast your tax-deferred balance (and future RMDs) compounds.

The standard advice — spend taxable first, Roth last — minimizes taxes for most people over a lifetime. But it accelerates traditional IRA growth, which means larger RMDs in your 70s and 80s. A modified sequence that draws from traditional accounts earlier (in the 65–72 window) can flatten the RMD curve by shrinking the taxable balance before distributions are forced.

The tradeoff: Spending from traditional accounts earlier means recognizing taxable income sooner. The question is whether doing so at 12–22% rates now is cheaper than being forced to recognize it at 24–32% rates later when RMDs, Social Security, and IRMAA all stack. For many retirees with $1M+ in traditional IRAs, the answer is yes — but the math is portfolio-specific.

See our Retirement Account Withdrawal Order Guide for the full analysis including the three-bucket approach and bracket-management math.

Which strategy fits your situation?

What these strategies can't do

No strategy eliminates RMDs from existing traditional IRA and 401(k) balances — the tax has been deferred, not erased. These strategies reduce the pace and size of distributions, but the underlying ordinary income tax will ultimately be paid, either by you or by your heirs. The goal is to pay at the lowest possible rates, over the most favorable sequence, in a way that aligns with your cash flow needs and estate goals.

Sources

1. IRS — Retirement Topics: Required Minimum Distributions. Roth IRA lifetime RMD exemption under IRC § 408A(c)(5); Roth 401(k) lifetime RMD elimination (SECURE 2.0 § 325, effective 2024).
2. IRS — Qualified Charitable Distributions. QCD eligibility (age 70½+), $111,000 annual limit (2026, inflation-indexed per IRS Rev. Proc. 2025-67), one-time split-interest provision ($53,000 limit, 2026), charity eligibility requirements.
3. 26 CFR § 1.401(a)(9)-6(q) — Qualifying Longevity Annuity Contracts. QLAC definition, exclusion from RMD calculation base, maximum deferral age (85), premium limits, required contract provisions.
4. IRS Notice 2025-67 — 2026 Retirement Plan Dollar Limits. QLAC premium limit for 2026: $210,000 per individual (inflation-adjusted from $200,000 SECURE 2.0 baseline, per IRS COLA schedule). SECURE 2.0 § 202 eliminated the 25%-of-account-balance cap.
5. IRS — Still-Working Exception, IRC § 401(a)(9)(C)(ii). Current employer plan RMD deferral while actively employed; 5% ownership threshold; plan document requirement.

RMD reduction strategy content verified against 2026 IRS rules and SECURE 2.0 provisions. QLAC limit of $210,000 per IRS Notice 2025-67. QCD limit of $111,000 per IRS Rev. Proc. 2025-67. Tax laws change; confirm current limits at irs.gov before acting.