Pre-73 IRA Drawdown Strategy: Planning Before RMDs Are Forced on You

Most people underestimate their first RMD because they picture today's balance. The RMD is calculated from the prior December 31 balance divided by the IRS Uniform Lifetime Table divisor for your age: 26.5 at 73 (about 3.77%), 24.6 at 75, 20.2 at 80, and 16.0 at 85. If your IRA keeps growing untouched until then, the balance at 73 may be 40% to 60% larger than it is at 63. Because the divisor shrinks every year, RMDs usually keep rising for years even as the account starts to decline. In the illustrative case below, the first RMD of about $113,000 grows to roughly $146,000 by 80 and $170,000 by 85.

The RMD does not arrive alone. By 73 most households are receiving Social Security, with 85% of benefits taxable once other income is meaningful, plus dividends, interest, and any pension. A couple with $85,000 of combined benefits, $30,000 of portfolio income, and a $113,000 RMD has well over $200,000 of gross income before anything discretionary, which puts them in the 22% or 24% bracket and above the $218,000 IRMAA threshold. None of that income is optional, and it arrives whether or not they need it for spending. The problem is not the tax on any one year; it is that the income floor keeps rising for the rest of your life.

The first lever is simply taking voluntary IRA distributions to fund spending before 73. For a couple who retires at 62 and wants to delay Social Security to 70, pulling living expenses from the IRA in the gap years uses up the lower brackets that would otherwise go unused, shrinks the future RMD, and buys a larger inflation-adjusted Social Security benefit for both of you. This is often the cleanest drawdown strategy because the money is spent rather than parked, and it addresses two problems at once: a smaller IRA and a larger lifetime annuity.

The second lever is Roth conversions. Where voluntary withdrawals fund spending, conversions move pre-tax dollars into a Roth where future growth and withdrawals are tax-free and no lifetime RMDs apply. Conversions are how you fill a target bracket beyond what you actually need to spend. The third lever is qualified charitable distributions, available from age 70 1/2, which let you send up to $111,000 per person in 2026 directly from an IRA to charity without the income showing up in AGI. For households that already give, QCDs are the most tax-efficient way to do it, and QCDs made after RMDs begin count toward the RMD, so planning a giving budget around them lets you leave more pre-tax money in place without paying tax on it.

The widow's penalty is the reason many plans target a higher bracket than the couple needs today. When one spouse dies, the survivor files as single starting the year after death, and single brackets are roughly half the width of joint brackets. The survivor keeps the larger Social Security benefit and inherits the entire IRA, so the RMDs continue at the same size or larger, but they are now taxed on a single return and measured against single IRMAA thresholds that start at $109,000. A couple comfortably in the 22% bracket can leave a survivor in the 24% or 32% bracket on nearly the same income. Drawing the IRA down while both spouses are alive and filing jointly is one of the few ways to reduce that exposure.

Picking the target bracket is a comparison, not a rule. Estimate the marginal rate your RMD-age income will face, both as a couple and for a survivor, including IRMAA and Arizona's 2.5% flat tax. Then find the highest bracket today whose all-in rate is at or below that future rate. For many couples with $1.5 million to $3 million of pre-tax assets, that lands at the top of the 22% bracket, adjusted downward to stay under an IRMAA threshold once they are 63 or older. For larger IRAs, or where the survivor scenario looks severe, the top of the 24% bracket is often justified. The 32% bracket rarely makes sense unless the projected RMDs are very large.

There are good reasons not to draw down aggressively. If your projected income at 73 is modest, the RMDs may be taxed at 12% or 22%, and prepaying at 22% or 24% gains nothing. If you plan to leave much of the IRA to charity, pre-tax dollars are the ideal asset to give at death, since a charity pays no income tax on them. And if there is a meaningful chance of years of expensive long-term care, keeping some pre-tax money can be efficient: qualified medical and long-term care expenses above 7.5% of AGI are deductible, and pairing large IRA withdrawals with large deductible care costs can produce very low effective tax rates late in life. The right amount of drawdown is the amount that balances these forces, not the maximum.

Get a projected RMD number before you decide anything. Take today's pre-tax balances, apply a conservative growth assumption, and calculate the RMD at 73 or 75 and at 80 and 85. Then add projected Social Security, pension, and portfolio income to see the bracket and IRMAA tier you are heading toward.

Use spending withdrawals first when you are delaying Social Security. If you retire before 70 and plan to delay, drawing living expenses from the IRA in the gap years is often the simplest and most valuable form of drawdown. It shrinks the IRA and raises the lifetime Social Security benefit for both spouses in one move.

Layer conversions on top when the bracket math supports it. Once spending withdrawals are in place, fill the remaining room in your target bracket with Roth conversions, checking IRMAA two years forward once you are 63 and the $250,000 NIIT threshold if you have meaningful investment income.

Plan your giving around QCDs if you are charitable. From 70 1/2, direct charitable gifts from the IRA rather than from cash or taxable accounts. That lowers AGI, and once RMDs begin it satisfies part or all of the required amount. It can also reduce how much you need to draw down before 73.

Run the survivor scenario. Model the same income on a single return with single IRMAA thresholds. If the survivor's picture looks materially worse, that argues for drawing down more while you are both alive and filing jointly.

Leave pre-tax money where it belongs. If heirs are charities, if future income looks modest, or if a long-term care stay is a real possibility, a smaller drawdown may be the better plan. The goal is the lowest lifetime tax for the household and heirs, not an empty IRA by 73.

• Projecting RMDs from today's balance instead of the larger balance the IRA is likely to reach by 73 or 75.
• Taking only the minimum until RMDs start, then facing a first RMD that lifts the household into a higher bracket and an IRMAA tier in year one.
• Claiming Social Security early and leaving the IRA untouched, when drawing from the IRA to delay benefits would have shrunk future RMDs and raised lifetime income.
• Ignoring the widow's penalty and choosing a target bracket based only on joint filing, when the surviving spouse will face single brackets on similar income.
• Giving to charity from cash or taxable accounts after 70 1/2 instead of using QCDs, which reduce AGI directly.
• Drawing the IRA down aggressively when heirs are charities or future income is low, prepaying tax that would never have been owed at a higher rate.
• Forgetting that people born in 1960 or later have RMDs at 75, which gives two extra years of drawdown room.