Why Do Some Planners Recommend Projecting RMDs a Decade Before Retirement?
Required distributions can feel like a problem for future retirement to worry about. The reasoning behind projecting them early is that, by the time they arrive, several of the choices that would have softened them are already off the table.
The short answer
Some planners recommend projecting required minimum distributions, or RMDs, a decade or more before they actually begin because the size of a future RMD depends on the balance built up in tax-deferred accounts by that point, and decisions made well in advance — like Roth conversions or adjusted withdrawal patterns — can influence that eventual balance. Waiting until distributions are already required leaves far fewer options for managing the tax impact.
Why RMDs can catch people off guard
A required minimum distribution is the amount the government requires be withdrawn each year from certain tax-deferred retirement accounts once the account owner reaches a set age, and that amount is added to taxable income for the year regardless of whether the money is actually needed for spending. Because the required amount is based on the account balance and a life-expectancy factor, a tax-deferred account that has grown substantially over a long career can produce a distribution large enough to push a retiree into a higher tax bracket, even if their actual spending needs are modest.
How early projection is meant to help
Projecting future RMDs years in advance gives a rough estimate of what those forced distributions could look like once they begin, based on current balances, assumed growth, and the rules in place at the time (which are set by the government and can change). With that projection in hand, some households consider spreading out Roth conversions over several years before RMDs start, moving a portion of tax-deferred savings into a Roth account and paying tax on the conversion at a potentially more favorable rate than what a large future RMD might trigger. Understanding how a Roth IRA conversion works is central to evaluating whether that kind of gradual shift makes sense for a given household.
Other decisions this projection can inform
- Withdrawal sequencing. Knowing a large RMD is coming can influence how a retiree draws down other accounts in the years leading up to it, discussed further under total return versus income-focused withdrawal strategies.
- Tax bracket management. Spreading taxable events across multiple years, rather than concentrating them once RMDs start, can help avoid pushing income into a higher bracket in any single year, tied to how tax brackets work.
- Charitable giving strategy. Some retirees plan around tools like a qualified charitable distribution, which can be used once RMDs are underway to direct part of a distribution to charity.
- Overall account balance mix. Reviewing the split between tax-deferred, Roth, and taxable accounts well ahead of RMD age can highlight whether one account type has grown disproportionately large relative to the others.
What to weigh
Projecting RMDs a decade out relies on assumptions — about future growth, future tax rules, and future spending needs — that are inherently uncertain that far in advance, so any such projection should be treated as a planning input rather than a precise forecast. The underlying rules for RMDs and Roth conversions are also set by the government and subject to change, which is part of why this kind of planning is usually revisited periodically rather than done once and left alone.
The takeaway
Projecting RMDs well before they start isn’t about predicting the future precisely — it’s about surfacing a potential tax issue early enough that there’s still time to do something about it, whether through gradual Roth conversions, adjusted withdrawal sequencing, or other planning tools. Waiting until the first required distribution arrives generally means facing whatever balance has accumulated with far fewer ways to influence the outcome.