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An RMD Strategy for Clients
With Philanthropic Goals

Reading Time: 6 minutes

For some clients, required minimum distributions provide needed income. For others, the challenge is deciding what to do with money they are required to withdraw but may not need.
older woman happily donating to a cause or organization

Required minimum distributions (RMDs) can create an interesting planning opportunity.

Clients spend decades building tax-deferred retirement savings. Then, once they hit a certain age (73 at the time of this writing), they are required to take money out — whether they need the income or not.

For clients who rely on those distributions for living expenses, the purpose may be clear.

But what about clients who don’t need the money?

Rather than automatically directing the RMD to a bank account, it may be worth considering another option.

Could a required minimum distribution (RMD) help accomplish other financial goals?

For clients with philanthropic goals, a qualified charitable distribution (QCD) may be one strategy to consider.

Understanding what clients want to accomplish with their wealth can help financial professionals identify opportunities to make required distributions more purposeful. That’s also where a broader goals-based planning conversation can be helpful. If philanthropy is already part of the client’s plan, a QCD may fit naturally into a broader RMD strategy.

Using an RMD to support philanthropic goals

A qualified charitable distribution (QCD) allows an IRA owner age 70½ or older to direct money from an eligible IRA directly to a qualifying charitable organization.

Once the client is subject to RMDs, a QCD can count toward satisfying all or part of that year’s required minimum distribution. Because a qualifying QCD is generally excluded from gross income, it may also help reduce the tax impact associated with taking an otherwise taxable IRA distribution.

For 2026, an individual can make up to $111,000 in QCDs for the year.1

For clients who already give regularly to a church, nonprofit, university, foundation, or other eligible organization, that may create an opportunity to rethink how those gifts are funded.

Instead of taking an RMD as taxable income and then making a separate charitable contribution from a bank account, the client may be able to direct an eligible distribution from the IRA straight to the charity.

Why tax treatment of a QCD is important

Consider a client who takes a taxable RMD, deposits it into a bank account, and then writes a check to charity.

Those are two separate transactions. The IRA distribution is generally included in income, while the charitable gift may provide a deduction only to the extent applicable under the client’s individual circumstances.

A QCD works differently.

When the requirements are met, the money moves directly from the IRA to the eligible charity, and the qualifying amount is excluded from gross income. The client cannot also claim a charitable deduction for that same QCD.

It’s important to note that not every annuity carrier allows QCDs. United Life allows QCDs from eligible qualified annuity contracts. For other carriers, be sure to confirm availability and requirements.

Which clients could benefit from this RMD strategy?

As you review clients approaching or already taking RMDs, consider:
  • Which clients don’t need their full RMD for living expenses?
  • Which clients have philanthropic goals?
  • Which clients may benefit from coordinating their RMD, philanthropic giving, and tax strategy?
For the right client, the appropriate RMD strategy may help turn a required distribution into an opportunity to support causes they care about.

Start the RMD Strategy Conversation

Download our customizable, consumer-ready RMD ad to help clients approaching RMD age think more strategically about their required withdrawals — and whether those distributions could help support other financial goals.
Download the customizable RMD Ad
Clients should consult a qualified tax professional regarding their individual circumstances, QCD eligibility, RMD calculations, and tax treatment.

1 https://www.fidelitycharitable.org/guidance/philanthropy/qualified-charitable-distribution.html

United Life Insurance Company does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. United Life cannot guarantee that the information herein is accurate, complete, or timely. United Life makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Clients should consult an attorney or tax professional regarding their specific situation.

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