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Case Study: RMD Management & Tax-Efficient Legacy Planning

By 
Brett Tushingham
,
CFP®
|
By 
By Farther

📘 Case Study #2: RMD Management & Tax-Efficient Legacy Planning
Clients: Bill (75) and Karen (72)
Location: Southport, NC
Retirement Status: Retired for 10 years

🧑🤝🧑 Profile: Bill and Karen are longtime donors to their church and active in their local community.

💥 Before: Big RMDs, Higher Premiums, and a Taxable Legacy

🌤️ After: Lower Taxes and a Smarter Estate Plan

🔍 The Problem: Tax Burdens Draining Retirement

With large IRA balances, Bill and Karen’s RMDs were forcing up to 85% of their Social Security to be taxed and increasing their Medicare premiums. They were being pushed into a higher tax bracket despite moderate spending. On top of that, they wanted to leave a legacy—without passing along a tax burden.

“It felt like we were losing control of our money, even though we were barely spending more,” Karen shared.

💡 The Strategy: Coordinated Giving and Conversion Plan

  • Used Qualified Charitable Distributions (QCDs) to satisfy RMDs tax-free while supporting causes they care about
  • Rebalanced income to reduce Social Security taxation
  • Transitioned taxable holdings into appreciated positions for step-up-in-basis advantages
  • Executed Roth conversions each year within the 24% bracket

✅ The Results: Gifting More, Taxing Less

  • Cut their effective tax rate by over 7 percentage points
  • Eliminated IRMAA penalties through careful income coordination
  • Left a cleaner, more tax-efficient inheritance to their children
  • Gave more to charity—without increasing their tax bill

🗣️ Client Review via Wealthtender
“Brett has helped us make better decisions regarding retirement withdrawals and tax planning. His insights have been incredibly valuable.”

💬 What Could a Tax-Smart Retirement Look Like for You?

You've seen how thoughtful planning helped others reduce taxes, avoid costly Medicare penalties, and leave a smarter legacy. Now it’s your turn. Let’s build a strategy that puts you in control — with more clarity, more confidence, and fewer surprises.

👉 Schedule Your Free Consultation

Brett Tushingham

,

Senior Vice President, Wealth Advisor

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