RMDs and Social Security: Tax Planning Strategy for Ages 73 and 75

The SECURE 2.0 Act raised Required Minimum Distribution (RMD) start ages to 73 for those born between 1951 and 1959 and 75 for those born in 1960 or later. Because RMDs increase your adjusted gross income (AGI), they can push more of your Social Security benefits into taxable territory. The core strategy is to manage your combined income (AGI + nontaxable interest + ½ of Social Security benefits) so you stay below—or just above—the thresholds that trigger 50% or 85% taxation of benefits.

When These Strategies Apply – and When They Don’t

This planning approach only matters if you hold traditional pre-tax IRA or 401(k) balances that require RMDs. If your retirement savings are entirely in Roth accounts, you have no RMDs, and your Social Security taxation is driven by other income sources. Similarly, if your combined income is already well below the first threshold ($25,000 single / $32,000 married filing jointly), RMDs from a small IRA may not push you into taxable territory. Check your specific income range before dedicating time to these tactics.

How RMDs and Social Security Taxation Interact

The IRS uses combined income to determine how much of your Social Security benefits are taxable.

Combined income = Adjusted Gross Income (AGI) + Tax-exempt interest + ½ of Social Security benefits

For 2025, the thresholds are:

Filing Status	0% taxable (below)	50% taxable (between)	85% taxable (above)
Single / Head of Household	$25,000	$25,000 – $34,000	$34,000+
Married Filing Jointly	$32,000	$32,000 – $44,000	$44,000+

• If your combined income is below the first threshold, none of your benefits are taxed.
• Between the thresholds, up to 50% of benefits are taxable.
• Above the second threshold, up to 85% of benefits are taxable.

Every dollar of RMD you take increases your AGI and therefore your combined income. That can bump you into a higher tier and cause an effective marginal tax rate much higher than your nominal bracket (the “tax torpedo”).

RMD Age Thresholds: 73 vs. 75

Birth Year	RMD Start Age	First Year You Must Take RMD
1950 or earlier	72 (pre-SECURE 2.0)	2023 or earlier
1951–1959	73	2025 (if turning 73 in 2025, first RMD by April 1, 2026)
1960 or later	75	2035 (if turning 75 in 2035, first RMD by April 1, 2036)

Important: For those turning 73 in 2025, the first RMD can be delayed until April 1, 2026, but that means two RMDs in 2026 (2025’s and 2026’s), which could spike your combined income. Plan accordingly.

Three Scenarios and What to Do

The key decision criterion is where your combined income currently sits relative to the 50% and 85% thresholds. Your recommended action changes depending on whether you are below, between, or above those lines.

Scenario A: Combined income below $25,000 (single) / $32,000 (MFJ)

• Your Social Security benefits are tax-free.
• Strategy: Consider delaying Social Security to age 70 while using investments or Roth IRA withdrawals for living expenses. This keeps your combined income low and allows your benefits to grow 8% per year.

Scenario B: Combined income between $25,000–$34,000 (single) / $32,000–$44,000 (MFJ)

• Up to 50% of benefits become taxable.
• Strategy: Use Qualified Charitable Distributions (QCDs) to satisfy part of your RMD without increasing AGI. In 2025, you can donate up to $108,000 directly from your IRA to a qualified charity, and that amount counts toward your RMD but is excluded from income.
• Alternative: If you are under RMD age, do partial Roth conversions to lower future RMD amounts.

Scenario C: Combined income above $34,000 (single) / $44,000 (MFJ)

• Up to 85% of benefits are taxable.
• Strategy: Maximize QCDs each year; you’re already paying tax on the maximum 85% of benefits, so avoid adding extra taxable RMD dollars. Also explore delaying Social Security so your higher benefit amount is partially offset by a smaller RMD later (since you wouldn’t have taken as many early withdrawals). If you are still working, consider using the earnings test rule (if below Full Retirement Age) to withhold benefits temporarily rather than letting RMDs push you higher.

What This Means for Your Next Move

For most retirees, the practical takeaway is straightforward: if your combined income is near the $34,000 (single) or $44,000 (MFJ) threshold, even a modest RMD can cause an effective marginal tax rate between 40% and 50% on that distribution plus the extra Social Security taxation. Use the scenario above to decide whether delaying Social Security, executing QCDs, or a combination of both will keep your tax bill in check. If you are in Scenario B, a small QCD of just a few thousand dollars may be enough to drop your combined income below the 85% tier.

How to Verify Your Situation

You can confirm your combined income and tax tier using the following steps:

1. Log into your my Social Security account (ssa.gov/myaccount) to see your annual benefit amount.

2. Retrieve your most recent tax return to find your AGI and any tax-exempt interest.

3. Calculate combined income: AGI + tax-exempt interest + (½ of annual Social Security benefit).

4. Compare to the threshold table above.

If you need a worksheet, IRS Publication 915 includes a step-by-step form. For 2025, also check the Social Security wage base ($168,600) and earnings test exempt amounts ($22,320 below FRA; $59,520 in year of FRA) if you are still working.

3 Expert Tips for RMD and Social Security Tax Planning

Tip 1: Use Qualified Charitable Distributions (QCDs) every year.

• Actionable step: Before December 31, instruct your IRA custodian to send a QCD directly to a qualified charity. The amount (up to $108,000 in 2025) counts toward your RMD but is excluded from your AGI, so it doesn’t increase your combined income.
• Common mistake: Taking the RMD, then donating the cash and claiming an itemized deduction. That doesn’t lower your AGI for Social Security tax purposes. QCD is far more efficient.

Tip 2: Delay Social Security if your RMDs will push you over the threshold.

• Actionable step: If you are within five years of starting RMDs and your combined income is already near the 85% tier, delay claiming Social Security until age 70. Each year of delay increases your benefit by 8% and reduces the number of years you’ll have to manage the tax torpedo.
• Common mistake: Claiming at 62 or Full Retirement Age while also taking early RMDs (if you have an inherited IRA or a small RMD from a prior account). This double whammy can lock in lower benefits and higher taxes.

Tip 3: Set up voluntary tax withholding from your Social Security check.

• Actionable step: Complete Form W-4V with the Social Security Administration to have 7%, 10%, 12%, or 22% withheld from each benefit payment. This covers the extra tax from your RMD and avoids underpayment penalties.
• Common mistake: Forgetting to adjust withholding after a large RMD. If your RMD is a lump sum in December, make sure your W-4V withholding is enough to cover the full year’s additional tax.

Step-by-Step Action Plan (Operator Flow)

1. Calculate your expected RMD for the current year. Use the IRS Uniform Lifetime Table (or your spouse’s age if you use the Joint Life Table) and your December 31 IRA balance from the prior year.

2. Estimate your annual Social Security benefit (from your my Social Security statement or benefit letter).

3. Compute your combined income: `(AGI from last year’s return + tax-exempt interest + ½ of SS benefit)` — use estimated AGI for the current year.

4. Identify your tax tier using the table above.

5. Choose your strategy based on the scenario (A, B, or C) you fall into.

• Checkpoint: If your combined income is within $5,000 of the next threshold, a small QCD or a minor delay in claiming SS can save you hundreds in taxes.

6. Take action before year-end:

• Execute QCD(s) to meet part of your RMD.
• If you haven’t started Social Security yet, decide on a claim month that aligns with your income goals.
• Complete Form W-4V with SSA to set withholding.

7. Success check: After implementation, verify that your combined income remains in the desired tier and that your total federal tax bill (including the Social Security taxable portion) is no more than you expected. If you also have Medicare IRMAA concerns, check that your Modified AGI stays under the IRMAA thresholds ($106,000 single / $212,000 MFJ for 2025).

Limitations and Trade-offs to Consider

No single strategy works perfectly in every situation. One common trade-off: delaying Social Security to age 70 increases your benefit by 8% per year, but if that higher benefit pushes you over the 85% threshold, the net increase after taxes may be less than expected. Similarly, QCDs are only useful if you have charitable intent; if you don’t itemize deductions, donating cash directly gives you no tax benefit, whereas a QCD still reduces your AGI. Another limitation: Roth conversions before RMD age can reduce future RMDs, but they increase your current-year income, which may push your Social Security taxation higher in the conversion year. Weigh the timing carefully using multi-year projections.

Additional Tools and Forms

• IRS Publication 915 – Social Security and Equivalent Railroad Retirement Benefits (full rules and worksheets)
• SSA Publication 05-10069 – How Work Affects Your Benefits (earnings test rules)
• Form W-4V – Voluntary Withholding Request (available at SSA.gov)
• Form SSA-44 – Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event (if your income drops)
• State taxation: 11 states tax Social Security benefits (CO, CT, KS, MN, MT, NE, NM, RI, UT, VT, WV). Check your state’s rules and whether it follows federal taxable-amount calculations.

This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional or financial planner to tailor a strategy to your specific situation.