A. Below are 2 options for older workers who don't need to tap savings to pay living expenses -
1. Give your RMD to charity
Once you turn age 70.5, you can donate up to $100,000 from your IRA directly to charity every year. The donation wil count as your RMD and won't be included in your adjusted gross income. This could help you avoid a high-income surcharge on your Medicare premiums and lower taxes on your Social Security benefits.
2. Invest in a QLAC
A qualified longevity annuity contract allows you to invest up to 25% of your IRA (up to a maximum $130,000) in a deferred income annuity that begins payouts years after you retire. The amount invested in QLAC isn't counted when calculating your RMD. Once you start taking income from the annuity, it will be taxed, along with your other RMD. But by that time, your tax rate should be lower because you won't be working anymore.