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When RMDs Loom Large, QCDs Offer a Gratifying Tax Break

When you were younger and busy building your nest egg, it’s likely you didn’t give much thought to the impact required minimum distributions (RMDs) could have on your retirement someday.

The plan back then, when you chose to contribute your savings to a traditional IRA, was probably straightforward: to enjoy the account’s tax advantages each year for many years while accumulating as much money as possible.

Somebody might have mentioned something about the IRS eventually getting a share of that money when you reached your early 70s, but that problem seemed a long way off. Now, here you are, and those RMDs are looming. And because of your diligent saving and smart investing, the tax bite — starting at age 72 and continuing every year after that — could be staggering.

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