Here's a question just about everyone asks, according to Slott. "Why not put the RMD in a Roth IRA? You've already paid the taxes."
You can't. The IRS forbids savers from reinvesting RMDs into tax-advantaged retirement accounts.
That doesn't preclude you from using those funds for other tax-planning plays, though.
Qualified charitable distribution: One way to avoid the tax hit on the RMD is to give the cash directly to charity through a qualified charitable distribution, said Schamis. This is only applicable to IRAs. Your custodian must transfer the distribution to the charity. The money you donate is excluded from your taxable income.
Pay the taxes on a Roth conversion: Maybe you want to convert other IRA funds to a Roth IRA after you've withdrawn your RMD. In this case, you can use the RMD money to pay the taxes on the conversion, Slott said.
Just remember that the RMD funds themselves cannot be converted to a Roth IRA.
Fund your taxable accounts: It's beneficial for retirees to build savings in different accounts — taxable, tax-free and tax-deferred — so that they have the option of adjusting their retirement income and managing their tax brackets in the future.
You can't put your RMD into an IRA or a Roth IRA, but you can sock it in a taxable brokerage account and allow it to grow.
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