If you are 70½ or older, you may already know your IRA comes with something called a Required Minimum Distribution. What you might not know is how flexible and impactful those funds can be for your financial planning and your charitable giving.
This guide breaks down ten things most people never learn about RMDs, so you can feel confident making decisions that support your goals and the causes you care about.
1. RMDs are mandatory starting at age 73
Once you turn 73, the IRS requires you to withdraw a minimum amount from your traditional IRA each year. Miss it and you may face significant penalties. So it pays to stay ahead of the deadline.
2. Your RMD increases as you age
Your yearly withdrawal is based on IRS life expectancy tables. That means the amount you must take out gradually grows over time.
3. RMDs count as taxable income
Every dollar you withdraw is included in your taxable income for the year. The exception is when you use a qualified charitable strategy like a QCD. More on that below.
4. You can withdraw more than the minimum
You are always allowed to take out more than your RMD. Just remember that the entire amount is taxable.
5. You can give up to $108,000 tax free through a Qualified Charitable Distribution (QCD) in 2025 and $111,000 in 2026!
A QCD allows you to transfer funds directly from your IRA to a qualified nonprofit. The best part is that the amount given does not count as taxable income. This is one of the most powerful tax strategies available to generous donors.
6. A QCD can satisfy your RMD
If you make a QCD, the amount you give can count toward your required distribution for the year. It can satisfy part of your RMD or all of it.
7. You can make QCD gifts starting at age 70½
Even though RMDs do not begin until age 73, you can start giving through a QCD as soon as you reach 70½. Many donors use these early years to reduce future taxable income.
8. You do not need to itemize to benefit
Unlike most charitable deductions, QCDs provide a tax advantage even if you take the standard deduction. This makes them especially useful for retirees who no longer itemize.
9. The gift must go directly from your IRA to the charity
To keep your gift tax free, the funds need to transfer straight from your IRA custodian to the nonprofit. If the money hits your bank account first, it becomes taxable income.
10. Your generosity can create lasting impact
Many donors use their RMD or QCD to make a meaningful gift that strengthens the causes they love. It is a simple way to create a legacy of support for future generations.
How Your RMD Can Make a Difference
If you are planning your RMD this year, consider using it in a way that benefits both you and the mission(s) you care about most. A charitable gift from your IRA can reduce your taxable income, simplify your giving, and make a real impact in your community.
