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Year-End Retirement Planning: Key Deadlines for RMDs, Roth Conversions, and IRMAA

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Year-end retirement planning includes critical deadlines that can impact taxes and compliance for retirees, especially those aged 73 and older. Required Minimum Distributions (RMDs) from traditional IRAs and 401(k)s must be taken by December 31 to avoid significant penalties, with specific rules regarding multiple accounts and current employer 401(k) plans for those still working. Recent changes mean Roth 401(k)s no longer require RMDs during the account holder's lifetime starting in 2024, while Roth IRAs never required RMDs. Qualified Charitable Distributions (QCDs) remain a strategic option for retirees aged 70½ or older to reduce taxable income effectively since the transferred amount satisfies RMD requirements without adding to taxable income. Year-end timing is essential because charities must receive QCD funds by December 31 to qualify. Income-Related Monthly Adjustment Amount (IRMAA) surcharges on Medicare Parts B and D premiums are influenced by modified adjusted gross income from two years prior, affecting premium amounts. Year-end income management including Roth conversions, capital gains realization, and RMD withdrawals can influence IRMAA brackets, which begin at $106,000 for singles and $212,000 for couples filing jointly in 2025. The period between retirement and age 73 presents an optimal window for Roth IRA conversions, allowing retirees to convert funds at potentially lower tax rates before mandatory RMDs begin. The deadline for Roth conversions is December 31 each year, with no extensions available. Additional considerations include managing health care flexible spending accounts (FSAs) subject to use-it-or-lose-it rules by year-end, verifying beneficiary designations on retirement and insurance accounts, and reviewing Social Security benefit timing for those approaching milestone ages. Proper year-end planning facilitates tax efficiency, regulatory compliance, and effective asset management for retirees and their advisors.