What Happened
For many retirees, required minimum distributions, or RMDs, are treated as a December task. The deadline may still be months away, but waiting can create unnecessary pressure around investment sales, charitable gifts, withholding, and paperwork.
RMDs generally begin at age 73. Traditional IRA owners must take them even if they are still working, while some employer plans may allow distributions to begin after retirement. Most annual RMDs are due by December 31. Special rules apply to the first distribution year and inherited accounts. IRS RMD guidance
Retirees who are charitably inclined may also want to consider whether a qualified charitable distribution, or QCD, fits their plans. A QCD generally moves money directly from an eligible IRA to a qualifying charity. It can satisfy some or all of an RMD when the requirements are met.
For 2026, the annual QCD exclusion limit is $111,000 per eligible IRA owner. A person must be at least age 70½ when the distribution is made. That is different from the age when RMDs generally begin. IRS Publication 590-B
What Matters Beneath the Noise
The real issue is not simply meeting a deadline. It is coordinating several connected decisions.
An RMD can provide spending money, cover estimated taxes, replenish cash reserves, or support planned gifts. The appropriate timing depends on the retiree’s income needs, account structure, investment allocation, and broader tax picture.
A QCD may be useful for someone who already intends to support charity. When properly completed, the qualifying amount is generally excluded from income. The donor cannot also claim a charitable deduction for that same amount. The transfer must generally go directly from the IRA custodian to an eligible organization. IRS charitable-contribution guidance
This distinction matters for state pension employees and other retirees who may have several income sources. A pension payment, an IRA, a 403(b), and a governmental 457 plan may each follow different distribution rules. A QCD generally comes from an eligible IRA, not directly from a pension or workplace retirement plan.
Early review provides time to determine:
- Which accounts have an RMD.
- Whether separate employer-plan distributions are required.
- How much retirement income is already being received.
- Whether tax withholding should be reviewed.
- Whether charitable giving is already part of the household plan.
- Which assets may need to be sold or repositioned to fund a distribution.
- Whether the IRA custodian and charity need additional processing time.
Why It Matters for Retirement-Minded Readers
Retirement planning is about creating dependable access to money while keeping taxes, investments, giving, and family priorities coordinated.
Someone who waits until December may discover that the custodian needs more time, the chosen charity is not eligible for a QCD, or an employer plan has separate RMD requirements. A rushed distribution can also lead to avoidable recordkeeping problems.
The IRS may impose a 25% excise tax on an RMD shortfall, although the rate can fall to 10% when a missed amount is corrected within the applicable window. That makes accuracy important, but fear should not drive the process. The better response is an organized review with enough time to correct misunderstandings. IRS RMD rules
For business owners, planning may be more complicated. A business owner could be balancing retirement-plan distributions with company income, estimated payments, charitable goals, and succession decisions. Reviewing these pieces together is more useful than treating the RMD as an isolated withdrawal.
What May Be Overhyped vs. What Matters
Overhyped: Every retiree needs a complicated year-end strategy.
What matters: Many retirees simply need a clear calculation, an appropriate source account, and reliable processing before the deadline.
Overhyped: A QCD is automatically better than making a normal charitable gift.
What matters: Its usefulness depends on age, account type, charitable intent, income, and the household’s tax situation.
Overhyped: The tax form will identify everything automatically.
What matters: The IRS added Code Y for identifying QCDs on Form 1099-R, but its use is optional for 2026. Retirees should retain the custodian’s records and the charity’s acknowledgment and review the reporting with a qualified tax professional. IRS 2026 Form 1099-R instructions
Advisor Perspective
A thoughtful advisor can help connect the distribution decision to the rest of the retirement plan.
That includes reviewing cash needs, investment allocation, charitable goals, withholding, beneficiary arrangements, and other sources of retirement income. The advisor can also coordinate with the client’s tax professional and IRA custodian when specialized tax questions arise.
The value is not predicting the market’s best day for a withdrawal. It is helping clients understand what needs to happen, why it matters, and how the decision supports the life and priorities they have planned for.
ACM does not provide tax or legal advice. Individuals should consult qualified tax and legal professionals about their circumstances.
Key Takeaways
- Do not wait until December to determine whether an RMD is required or which account must provide it.
- A QCD may satisfy part or all of an RMD, but eligibility, direct-transfer, charitable-organization, and reporting requirements apply.
- Coordinate distributions with cash flow, investments, taxes, charitable intentions, and the rest of the retirement plan.
Retirement topics - Required minimum distributions (RMDs) | Internal Revenue Service