3 Little-Known RMD Rules That Could Save You Money

Key Points You don't have to take an RMD from certain retirement accounts, such as a Roth IRA. You must calculate IRA RMDs individually, but you don't have to withdraw funds from every traditional IRA. A qualified charitable distribution (QCD) will fulfill your RMD without raising your tax bill. The $23,760 Social Security bonus most retirees completely overlook › Required minimum distributions (RMDs) can be relatively uneventful if you routinely withdraw more than you need to cover your living expenses. But if you're only taking these withdrawals to avoid the IRS's 25% penalty for not doing so, they can be a serious pain. You're forced to sell investments when you don't want to, and you'll face a higher tax bill as a result. Fortunately, if you understand how RMDs work, you can use the following three tricks to reduce your 2026 tax bill and hold on to more of your savings. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Image source: Getty Images. 1. You don't have to take RMDs from all of your retirement accounts Several retirement accounts are exempt from RMD rules. You don't have to take withdrawals from your Roth accounts, since you don't owe taxes on these distributions anyway. You can also skip withdrawals from your current 401(k) if you're still working and own less than 5% of the company. If you have old 401(k)s, you would still have to take RMDs from these, but you may be able to avoid this in future years by rolling the old 401(k)s over into your current 401(k). Check with your plan administrator to see if this is possible. 2. You don't have to take withdrawals from every one of your traditional IRAs Traditional IRAs follow a special rule: You must calculate RMDs for each account individually, but you can withdraw that RMD from a different account, as long as your total IRA withdrawals meet or exceed your total IRA RMDs. For example, if you have two traditional IRAs, one with a $5,000 RMD and one with a $10,000 RMD, you can withdraw $15,000 from one, $7,500 from each, or any combination you like, as long as the total withdrawn is at least $15,000. This isn't the case for 401(k)s. If you have one IRA that is doing well and another that is doing poorly, you might prefer to take your RMDs from the one that's doing well, rather than selling assets in the other and locking in the losses. 3. You can do a qualified charitable distribution (QCD) to avoid the bigger tax bill The IRS offers an alternative to RMDs for those who really don't want the increased tax bill -- a qualified charitable distribution (QCD). This is where you donate your RMD to a qualifying charitable organization. You won't get to keep the funds, but the IRS won't add them to your tax bill for the year either. To do a QCD correctly, you must tell your plan administrator which organization you'd like to donate the funds to. It will then send the money directly to the charity or cut you a check in the charity's name that you can mail yourself. The check cannot be made out to you, or it won't count as a QCD. You've still got plenty of time to sort out your 2026 RMDs. Adults who will be 74 or older by the end of the year have until Dec. 31, and those who will turn 73 this year have until April 1, 2027. But it doesn't hurt to start working out a plan, so you're not scrambling to sort this out right before the deadline. The $23,760 Social Security bonus most retirees completely overlook If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more ... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies. View the "Social Security secrets" » The Motley Fool has a disclosure policy .

You don't have to take an RMD from certain retirement accounts, such as a Roth IRA.

You must calculate IRA RMDs individually, but you don't have to withdraw funds from every traditional IRA.

A qualified charitable distribution (QCD) will fulfill your RMD without raising your tax bill.

Required minimum distributions (RMDs) can be relatively uneventful if you routinely withdraw more than you need to cover your living expenses. But if you're only taking these withdrawals to avoid the IRS's 25% penalty for not doing so, they can be a serious pain.

You're forced to sell investments when you don't want to, and you'll face a higher tax bill as a result. Fortunately, if you understand how RMDs work, you can use the following three tricks to reduce your 2026 tax bill and hold on to more of your savings.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

Several retirement accounts are exempt from RMD rules. You don't have to take withdrawals from your Roth accounts, since you don't owe taxes on these distributions anyway. You can also skip withdrawals from your current 401(k) if you're still working and own less than 5% of the company.