August 27, 2026

The years between retirement and required minimum distributions can create valuable tax-planning opportunities. Learn how Roth conversions, capital gains, charitable giving, and income timing may fit into a coordinated retirement strategy.

Retirement is often viewed as the point when financial planning becomes simpler. The paycheck stops, the portfolio takes over, and the focus shifts toward generating income.

From a tax-planning perspective, however, the first several years of retirement can be some of the most important.

For many retirees, there is a period after earned income declines but before required minimum distributions, or RMDs, begin. Under current federal rules, RMDs generally begin at age 73, although the applicable starting age can be 75 for certain younger individuals.

That gap can create an opportunity to make intentional tax decisions before retirement-account distributions begin adding taxable income automatically.

1. Consider Whether Partial Roth Conversions Make Sense

A common planning opportunity involves converting a portion of a traditional IRA to a Roth IRA.

A Roth conversion generally creates taxable income in the year of the conversion. That may sound counterintuitive—why voluntarily accelerate taxes?

The answer is that retirement may temporarily place someone in a lower marginal tax bracket than during their working years or later retirement years. Converting strategically during that period may allow a retiree to recognize some taxable income at a rate they find acceptable while reducing the amount remaining in tax-deferred accounts.

Roth IRAs also generally are not subject to lifetime RMDs for the original owner.

The key word is strategically. A large conversion can push income into higher tax brackets or affect other income-sensitive costs, so Roth conversions are typically best evaluated as part of a multiyear plan rather than as an isolated transaction.

2. Use Lower-Income Years Intentionally

After retirement, taxable income may decline substantially—particularly before Social Security, pensions, or RMDs are fully in the picture.

Instead of simply trying to report the lowest possible income each year, retirees can ask a different question:

How much income can we recognize intentionally at an acceptable tax cost?

That could mean converting retirement assets, realizing selected investment gains, or adjusting withdrawals among taxable, tax-deferred, and Roth accounts.

Federal tax brackets and deductions are adjusted periodically, so the amount of available “room” should be evaluated each year rather than assumed to remain constant. For 2026, for example, the IRS has published updated federal income-tax brackets and standard deductions.

3. Review Appreciated Investments Before Selling

Retirees with taxable investment accounts may also have opportunities to manage capital gains.

A year with relatively low taxable income could provide a more favorable environment for realizing certain long-term gains. But capital-gain decisions should not be based on the tax rate alone.

Selling an appreciated asset can increase adjusted gross income, which may have consequences elsewhere. The better question is whether realizing gains fits the household’s broader investment, cash-flow, charitable, and tax strategy.

4. Pay Attention to Medicare Income Thresholds

One frequently overlooked issue is the interaction between tax planning and Medicare premiums.

Higher modified adjusted gross income can result in income-related adjustments to Medicare Part B and Part D premiums. Medicare generally looks back to an earlier tax return when determining these amounts; for 2026 premiums, Social Security generally uses 2024 income.

That means a Roth conversion or large capital gain may have consequences beyond the income-tax return itself.

This does not necessarily mean retirees should avoid recognizing income. It means the potential tax benefit should be considered alongside the possible Medicare impact.

5. Coordinate Charitable Giving With Retirement Accounts

Charitably inclined retirees may have another planning tool available beginning at age 70½.

A qualified charitable distribution, or QCD, generally allows an eligible IRA owner to direct qualifying funds from an IRA directly to an eligible charity. QCDs can also count toward an RMD once RMDs begin.

For families already planning significant charitable giving, coordinating philanthropy with retirement-account strategy can be worth discussing before simply writing checks from a bank account.

The Goal Is Not Simply to Minimize This Year’s Tax Bill

The years immediately after retirement can create unusual flexibility. But the best decision is rarely the one that produces the smallest tax bill this year.

The larger objective is to coordinate taxes, retirement distributions, investment income, Medicare considerations, charitable goals, and estate planning across many years.

For business owners, post-liquidity families, and retirees with meaningful tax-deferred assets, this planning window deserves particular attention. Omni 360 Advisors and Omni Legacy Law work with families to evaluate how retirement-income, tax, and legacy decisions interact as part of a broader financial picture.

Tax strategies depend on individual circumstances and current law. Investors should consult their tax and financial professionals before implementing a strategy.

This blog was developed with the assistance of AI-based tools for research, drafting and editing support (ChatGPT), and reviewed by OMNI 360 personnel for accuracy and relevance. The information provided is educational and general in nature and is not intended to be, nor should it be construed as, specific investment, tax, or legal advice.