Finish the Year Strong: Five Retirement Planning Decisions to Review Before 2027 | Part 2 of 5
RMDs, Roth Conversions, QCDs and the 2026 Tax Window
Friday, October 9, 2026
One of the biggest differences between working and retirement is that retirees can sometimes have more control over where taxable income comes from. That flexibility creates opportunities, but it also creates decisions that become more important as December 31 approaches.
Three of the most common year-end retirement tax topics are required minimum distributions, Roth conversions and qualified charitable distributions. They sound like separate strategies, but they often compete for the same space on the tax return. That is why they should be evaluated together.
Required Minimum Distributions Come First
Traditional IRAs and many retirement plans eventually require annual distributions. Under current federal rules, required minimum distributions generally begin at age 73 for people reaching the applicable age under the SECURE 2.0 schedule. Roth IRAs and designated Roth accounts in employer plans do not require lifetime RMDs for the original owner.
For most people already subject to RMDs, the annual distribution must be completed by December 31. The first RMD can have a special delayed deadline, but delaying it can cause two taxable RMDs to fall into the following year. That can increase taxable income and may affect other items tied to income, so the timing deserves attention.
A Roth Conversion Uses Taxable Income Intentionally
A Roth conversion moves money from a pre-tax retirement account into a Roth account. The converted amount is generally taxable in the year of conversion. In exchange, qualified Roth withdrawals can be tax-free later, and Roth assets can provide additional flexibility for future retirement income.
The important question is not whether Roth accounts are good or bad. It is whether voluntarily recognizing income today makes sense compared with the taxes and planning constraints that could exist later. That analysis may include current and future tax brackets, future RMDs, Social Security taxation, Medicare income-related surcharges, estate goals and the amount of money available outside the IRA to pay the conversion tax.
2026 Has Several Tax Changes Worth Reviewing
For tax year 2026, the federal standard deduction is $32,200 for married couples filing jointly and $16,100 for single filers. Taxpayers age 65 and older may also qualify for a temporary additional $6,000 senior deduction per eligible person, subject to income phaseouts. Those rules can change the amount of taxable income a household can recognize before moving into a higher effective tax cost.
The lesson is not to convert up to a particular number simply because a tax bracket exists. A good Roth conversion analysis considers the whole tax return and the ripple effects of additional income.
Qualified Charitable Distributions Can Serve Two Goals at Once
IRA owners age 70½ or older may be able to make qualified charitable distributions directly from an IRA to eligible charities. A properly completed QCD can be excluded from taxable income and can also count toward an RMD. For 2026, the annual QCD exclusion limit is $111,000 per eligible IRA owner.
That can make a QCD especially useful for someone who is already giving to charity and is also taking taxable IRA distributions. The transaction has to follow specific rules, including the requirement that the distribution generally go directly from the IRA custodian to an eligible charitable organization.
Charitable Giving Rules Changed in 2026 Too
Beginning in 2026, taxpayers who do not itemize may be able to deduct up to $1,000 of qualifying cash charitable contributions, or $2,000 for married couples filing jointly. That does not replace QCD planning, but it is another reason charitable giving should be coordinated with the tax plan rather than treated as an afterthought.
One Decision Can Change the Others
Consider the sequence. An RMD adds taxable income. A Roth conversion adds taxable income. A QCD can satisfy part of an RMD without adding that amount to taxable income when the rules are met. Each choice can affect the capacity for the others. That is why year-end retirement tax planning should begin before the final weeks of December.
How Otium Can Help
Otium Financial Planners can help coordinate the retirement-income and tax-planning pieces before year-end. We can model RMDs, potential Roth conversions, charitable distributions and withdrawal strategies, then work alongside a client's tax professional when appropriate. The goal is not simply to minimize one year's taxes. It is to make thoughtful decisions about when and how retirement assets are used over the course of retirement.