Before you retire, consider planning for your required minimum distributions (RMDs). This can be more complicated than you imagine if you have significant retirement assets in qualified plans, but with a little planning, you can achieve a tax-friendly result.
KNOW THE RULES
Retirees can wait until April 1 of the year after their 73rd birthday to begin taking withdrawals. In 2033, the age for taking RMDs will increase to 75. There is a penalty tax for missing a required withdrawal.
CONSIDER THESE MOVES
Converting some traditional IRA assets to a tax-free Roth IRA during lower-income years to limit the future income tax bite (you’ll pay ordinary income tax upon conversion). You can also invest some IRA money in a Qualified Longevity Annuity Contract (QLAC), which can delay required payments for several more years.