The RMD Wall and How to Deflate It

The mechanical recap of RMDs lives in section “Required Minimum Distributions: Navigating the Maze”. The strategic recap for this chapter is simpler: at age 73 (or 75 for those born in 1960 or later), the IRS forces a distribution from every pre-tax account you own, computed as the prior-year-end balance divided by an IRS table factor that starts near 26 and shrinks each year. A $3M pre-tax balance at the first RMD year generates a roughly $113,000 distribution. By age 85 the divisor is around 16 and the same balance—if it has grown—forces correspondingly larger distributions. There is no opt-out.

If you have done the conversion-window work, the wall is shorter. If you have not, the levers are:

Pre-RMD conversions

The cheapest reduction is the one you did before RMDs began. Once RMDs start, you cannot convert the RMD itself—the RMD must be taken before any remaining balance can be converted.

Qualified Charitable Distributions (QCDs)

Under IRC §408(d)(8), “Distributions for charitable purposes”, past age 70½, a QCD routes IRA money straight to charity, satisfies the RMD up to its amount, and never appears in AGI. The 2026 cap is $111,000 per person, indexed, so a couple can discharge $222,000 of pre-tax balance every year at zero AGI cost — strictly better than taking the RMD as income and giving from taxable, because the excluded dollars never touch IRMAA, the torpedo, or the 0.5% charitable floor. The full mechanics, including the direct-transfer requirement and the prohibition on routing a QCD to a DAF, are in section “Give From the IRA After 70½: the QCD”.

Qualified Longevity Annuity Contracts (QLACs)

Under Treas. Reg. §1.401(a)(9)-6, “Required minimum distributions”, you may transfer up to $210,000 (2026, indexed) from a pre-tax IRA into a deferred income annuity that begins payments as late as age 85. SECURE 2.0 removed the old 25%-of-account-balance ceiling, so the dollar cap is now the only limit — material for a smaller IRA, which previously could not fund a full QLAC at all. The amount transferred is removed from your RMD-base capital until payments begin. A married couple can defer $420,000 of RMD-base capital to age 85, shrinking the early-RMD forced income meaningfully. The trade is illiquidity (you cannot get the principal back) and counterparty risk (relying on the insurer for 20+ years). For a household that can afford the illiquidity, the QLAC functions as an RMD-suppression tool.

Roth designated account rollouts

Under SECURE 2.0, Roth designated accounts within employer plans are exempt from lifetime RMDs starting in 2024. Rolling them over to a personal Roth IRA remains best practice anyway: personal Roth IRAs escape the plan-specific administrative delays common to employer-sponsored platforms, offer an unrestricted investment menu, and consolidate the five-year clocks. Consolidate soon after retirement.

Spousal beneficiary planning

An RMD is computed against the owner’s age. A surviving spouse who inherits and treats the IRA as their own resets the calculation to their own age; an inherited IRA treated as an inherited IRA stays on the decedent’s schedule. Choose deliberately, particularly when there is a meaningful age gap.

Asset location inside the wall

The RMD is computed on the prior-year balance, so the growth rate of the pre-tax bucket is itself a lever. Once the conversion ladder is running, locate the slow-growth assets — the bond sleeve — in the pre-tax account and let the high-growth assets compound in the Roth, per the location logic of section “Assigning Assets into Tax Buckets”. The same portfolio, arranged this way, walks into each RMD year with a smaller forced distribution and a larger tax-free balance; arranged the other way, it does the opposite. This is the one RMD lever that costs nothing and requires no transaction outside the wrappers.