What Should I Do With My IRA Once I Retire?

When you retire, you take the big step of shifting from the era of wealth accumulation to wealth management. Managing your IRA in retirement is an important project. You want to strike a balance between a newfound need for security and a continued need for growth. You can no longer wait out downturns and replace losses, but you will need this money for decades to come. Every household will have different money management needs, but first there are a few things to consider.

To create a retirement strategy that aligns with your goals, consider speaking with a financial advisor.

Examine a Roth Conversion

First things first, it’s worth doing the math for a Roth IRA conversion.

At any time, including retirement, you can roll over your tax-advantaged retirement accounts from a pre-tax account, such as a 401(k) or an IRA. into a post-tax Roth IRA. While there are tax implications to doing this, there’s no cap on the money that you can roll over.

The advantage to this is that you can partially or entirely avoid income taxes for your retirement portfolio. However, you will pay full income taxes on all rollover funds in the year you do so.

While your Roth IRA continues to grow tax-free, the money you paid on that conversion can also continue to grow. This offers both a present cost and an opportunity cost.

If a Roth conversion works, it can be a significant long-term advantage. However, if you choose to roll your money over to a Roth, you may have to leave the funds for five years before withdrawing to avoid penalties.

A financial advisor can discuss the rules of retirement accounts with you.

Rebalance for Risk

Portfolio balance refers to the percent of assets make up the different sections of your retirement portfolio, such as stocks, funds and bonds.

In your working life, your portfolio will be significantly balanced in favor of equities. Many advisors recommend that you hold an asset allocation between 60% and 80% of your retirement portfolio in assets like stocks and index funds while accumulating wealth.

In retirement, your risk profile changes. You no longer have new income with which to replace losses. Perhaps more importantly, you no longer have the time to wait out market downturns. Even if the market dips, you will still need to cash out assets for your income. This argues for a balance toward security.

At the same time, you will likely need these funds for decades to come. Inflation and costs will grow over time, and ideally you want your money to grow at a faster rate. This means you will still need some growth-oriented assets on hand.

As you retire, be sure to rebalance your IRA around these needs. During retirement, you want your IRA to hold between 40% and 70% low-risk assets like bonds.

Create a specific plan that meets your needs for inflation and wealth management, while anticipating your needs for risk management.

Manage Your RMDs

Once you reach age 73, the IRS requires you to start taking required minimum distributions (RMDs) from your pre-tax retirement accounts. This includes both traditional IRAs and 401(k)s.

These mandatory withdrawals are taxed as ordinary income, even if you don’t need the funds to cover living expenses. Missing an RMD or taking too little can result in a steep penalty.

The key to managing RMDs is timing and tax strategy. Many retirees coordinate withdrawals to reduce the overall tax impact. For example, you may first delay claiming Social Security or tap taxable investment accounts to lower income in early retirement. Other retirees spread out withdrawals across multiple accounts to avoid bumping into a higher tax bracket.

It’s also worth looking at how your RMDs fit into your broader income plan. If you have several accounts, calculate how much you’ll need to take from each to meet RMD requirements while maintaining your preferred investment mix. Some retirees reinvest their RMDs into taxable accounts or buy long-term care insurance, charitable gifts or future travel goals.

To estimate how much you must withdraw from your retirement accounts once you reach RMD age, use SmartAsset’s RMD Calculator.

Required Minimum Distribution (RMD) Calculator

Estimate your next RMD using your age, balance and expected returns.

Quickly estimate your RMDs and when to take them

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About This Calculator

This calculator estimates RMDs by dividing the user's prior year's Dec. 31 account balance by the IRS Distribution Period based on their age. Users can enter their birth year, prior-year balances and an expected annual return to estimate the timing and amount of future RMDs.

For IRAs (excluding Roth IRAs), users may combine balances and take the total RMD from one or more accounts. For 401(k)s and similar workplace plans*, RMDs must be calculated and taken separately from each account, so balances should be entered individually.

^*The IRS allows those with multiple 403(b) accounts to aggregate their balances and split their RMDs across these accounts.

Assumptions

This calculator assumes users have an RMD age of either 73 or 75. Users born between 1951 and 1959 are required to take their first RMD by April 1 of the year following their 73rd birthday. Users born in 1960 and later must take their first RMD by April 1 of the year following their 75th birthday.

This calculator uses the IRS Uniform Lifetime Table to estimate RMDs. This table generally applies to account owners age 73 or older whose spouse is either less than 10 years younger or not their sole primary beneficiary.

However, if a user's spouse is more than 10 years younger and is their sole primary beneficiary, the IRS Joint and Last Survivor Expectancy Table must be used instead. Likewise, if the user is the beneficiary of an inherited IRA or retirement account, RMDs must be calculated using the IRS Single Life Expectancy Table. In these cases, users will need to calculate their RMD manually or consult a finance professional.

For users already required to take an RMD for the current year, the calculator uses their account balance as of December 31 of the previous year to compute the RMD. For users who haven't yet reached RMD age, the calculator applies their expected annual rate of return to that same prior-year-end balance to project future balances, which are then used to estimate RMDs.

This RMD calculator uses the IRS Uniform Lifetime Table, but certain users may need to use a different IRS table depending on their beneficiary designation or marital status. It's the user's responsibility to confirm which table applies to their situation, and tables may be subject to change.

Actual results may vary based on individual circumstances, future account performance and changes in tax laws or IRS regulations. Estimates provided by this calculator do not guarantee future distribution amounts or account balances. Past performance is not indicative of future results.

SmartAsset.com does not provide legal, tax, accounting or financial advice (except for referring users to third-party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States). Articles, opinions and tools are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. Users should consult their accountant, tax advisor or legal professional to address their particular situation.

Manage Your Taxes

Finally, as you plan for your IRA, make sure to account for taxes.

Unless you make a Roth conversion, you will pay income taxes on money that you withdraw from your IRA. This lowers the total funds you have to live off during retirement.

Calculate the taxes that you will pay on your IRA withdrawals. Plan on living off that income, rather than the hypothetical pre-tax income. This will reflect your true financial position in retirement.

If you need help planning your taxes and retirement, match with a financial advisor today.

How QCDs Could Help Reduce Your RMD Tax Bill

If you’re charitably inclined, there’s a more tax-efficient way to handle donations than withdrawing your RMD, paying the tax and then writing a check to charity.

A Qualified Charitable Distribution (QCD) lets you transfer funds directly from your IRA to a qualifying 501(c)(3) charity. This amount can count toward satisfying your RMD without ever being added to your taxable income.

This distinction matters more than it might seem. Because you exclude a QCD from your gross income entirely, you benefit. This is the case even if you wouldn’t otherwise get a tax advantage from itemizing a charitable gift. For retirees who give to charity regularly, this can meaningfully lower taxable income instead of withdrawing the RMD as ordinary income and donating afterward.

For 2026, individuals age 70½ or older can direct up to $111,000 per person to charity through QCDs. This amount is indexed for inflation and adjusts annually. Married couples with separate IRAs can each use their own annual limit, potentially directing up to $222,000 combined.

The mechanics matter here, and getting them wrong can turn a QCD into an ordinary taxable withdrawal. The funds must go directly from your IRA custodian to the charity. You can never take possession of the money yourself, even briefly, or you will lose the tax benefit.

It’s also worth initiating the transfer well before year-end. The transfer needs to be completed - not just requested - by December 31 to count for that tax year.

Combined with the other strategies, a QCD can be one of the more effective tools for reducing the tax impact of RMDs.

Bottom Line

As you enter retirement, it’s important to make a plan for your various retirement accounts. Look at rebalancing your assets, consider a Roth conversion and make a long-term plan for your taxes and lifestyle. And, above all else, do not forget that money management doesn’t end just because work did.

Retirement Tax Management Tips

A financial advisor can help you build a comprehensive retirement plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Managing your taxes in retirement is essential. You will pay taxes on just about every source of income except for Roth portfolios, including Social Security. Make sure that you maximize every advantage that you can get.