What Should I Do With My RMD If I Don’t Need the Income?

If you’re turning 73 this year, congratulations. This milestone is not only a reflection of a life well-lived but a reminder that you are reaching the age when Required Minimum Distributions (RMDs) become part of your financial reality.

Here is a familiar question for many Americans:

“I will be 73 years old this year. I’m taking my RMD disbursements in April 2026. Can I have those funds transferred to another type of income fund? I don’t need to use them right now. What are my options?”

It’s a good question for those who have been diligent savers and don’t immediately need the extra income from their RMDs. The key thing to know is this: once your RMD is distributed, it becomes taxable income. There’s no way to defer it by rolling it into another retirement vehicle.

But that doesn’t mean you’re out of strategic options.

Explore A Qualified Charitable Distribution

If you’re charitably inclined and want to minimize your tax burden, a Qualified Charitable Distribution (QCD) could be the ideal move. QCDs allow individuals aged 70½ and older to donate up to $108,000 annually (as of 2024) directly from their IRA to one or more qualified charities. These distributions can count toward your RMD but are not included in your taxable income.

This creates a powerful tax advantage.

The QCD reduces your AGI (Adjusted Gross Income), while a normal charitable contribution only reduces your taxable income after AGI has been calculated.

Why does that matter? Because your AGI affects more than just your income taxes—it can influence Medicare premiums (like IRMAA surcharges), how much of your Social Security gets taxed, and your eligibility for deductions or credits. Lowering AGI is a better move than simply stacking deductions.

So What’s the Bottom Line?

If you don’t need your RMD for living expenses, a QCD lets you:

• Satisfy your RMD requirements,
• Avoid paying income tax on the distribution,
• Support the causes you care about in a meaningful way, and
• Potentially reduce your overall tax burden and increase financial flexibility.

At JB Consulting Firm, I help nonprofits and donors unlock the power of planned giving strategies like this every day. If you’re interested in making a bigger impact through tax-wise giving, or you represent a nonprofit that wants to better serve donors like this, I’m here to help.