In October 2026 many retirees face the same tension: required minimum distributions (RMDs) now begin at 73, traditional retirement accounts hold the bulk of household wealth, and Social Security plus Medicare premiums can climb quickly as taxable income rises. This case study examines how Mark and Elaine Johnson — a married couple from Ohio — combined a modest defined‑benefit pension, selective IRA withdrawals and qualified charitable distributions (QCDs) to manage RMD impact, limit Social Security taxability, and preserve a Roth IRA as a tax‑free reserve.

Profile: goals, assets and constraints

Mark, 69, retired from a mid‑sized manufacturing employer at 63; Elaine, 66, retired from a public school system at 64. Their financial picture in early 2026:

  • Pension (Mark): $18,000/year (lifetime single‑life); pension had an option to start at any age 62–70.
  • Social Security: Both had earned credits; full retirement age benefits amounted to $1,350 (Mark) and $900 (Elaine); they planned to delay claiming until 70 to maximize benefit.
  • Tax‑deferred assets: $820,000 split between Mark’s 401(k) ($520k) and an IRA rollover he performed when leaving a previous employer ($300k).
  • Roth IRA: $120,000 (Elaine’s small Roth from earlier contributions and years of gains).
  • Taxable brokerage: $110,000 used for near‑term spending and emergencies.

Their objectives were straightforward: fund spending, avoid unnecessary taxation of Social Security, limit Medicare IRMAA surcharges, and preserve the Roth IRA as a legacy/emergency bucket. They wanted to keep Social Security until 70 but needed income to cover living expenses in the interim.

Key constraints

By 2026 required minimum distributions begin at age 73 for people in their cohort. With more than $800k in tax‑deferred accounts, the Johnsons’ RMDs would be nontrivial and could push provisional income into brackets that increase Social Security taxation and Medicare surcharges. They also wanted to avoid depleting their Roth IRA, which they valued for tax‑free flexibility later.

Strategy implemented

The couple worked with a financial planner to implement a four‑part strategy that leaned on the pension as an income floor, used systematic IRA withdrawals before RMD age, preserved the Roth, and applied QCDs once RMDs began.

  1. Use the pension as a floor and time its start date. Mark elected to start his pension at age 67. That decision produced a reliable $18,000 per year that covered baseline housing, utilities and insurance. Using the pension as a stable income base reduced the need to tap large taxable or tax‑deferred withdrawals while they delayed Social Security.
  2. Delay Social Security to age 70. With the pension covering core expenses, both delayed Social Security to 70. The delay increased benefits (credited at roughly 8% per year) and created a larger guaranteed inflation‑adjusted income stream later — a hedge against longevity risk.
  3. Fill the spending gap with taxable account withdrawals and modest IRA distributions before 73. Between ages 67–72, the Johnsons funded the gap using their taxable brokerage and modest distributions from the IRA — careful not to withdraw more than necessary. The IRA withdrawals were sized to keep provisional income below the thresholds where Social Security becomes more heavily taxed and where higher Medicare premiums kick in. In practice they targeted taxable income bands rather than a specific dollar amount, adjusting annually for capital gains, dividend patterns and pension receipts.
  4. Satisfy RMDs with QCDs once required minimum distributions begin. At age 73, when RMDs became mandatory, they began using qualified charitable distributions from the IRA to satisfy charitable goals and reduce taxable income. QCDs (up to $100,000 per taxpayer per year as of current law) count toward the RMD and are excluded from adjusted gross income — a useful tool to blunt the tax consequences of required distributions and to limit provisional income that determines Social Security taxation and Medicare IRMAA assessments.

Numbers that made the plan work

Two concrete annual examples illustrate the mechanics:

  • Pre‑RMD year (age 69): Pension $18k + taxable withdrawals $18k + IRA withdrawals $10k = $46k taxable income (generally below the thresholds that increase SS taxation materially). Social Security deferred.
  • RMD year (age 73): Required IRA distribution is $28k. The Johnsons directed $20k of that as QCDs to two charities and withdrew the remaining $8k as taxable income (plus pension). The QCDs satisfied much of the RMD and excluded that $20k from AGI, helping keep provisional income lower.

These moves are not tax arbitrage magic — but by sequencing income sources the Johnsons avoided bumping into higher tax tiers that would have: 1) increased the portion of Social Security subject to tax, 2) raised their Medicare Part B/D IRMAA surcharges, and 3) left less of their Roth IRA exposed to future needs.

Why they left the 401(k) in plan

When asked why they did not consolidate all tax‑deferred funds into an IRA (a common recommendation), the Johnsons cited two practical reasons: 1) their employer 401(k) offered lower fees on a few passive index funds than comparable retail IRAs, and 2) plan accounts have stronger asset protection in bankruptcy in many states. Leaving the 401(k) in‑plan simplified administration and retained creditor protection, while the IRA held the balance used for QCDs and selected withdrawals.

Outcomes after three years

By the end of the third year following the plan implementation the Johnsons had:

  • Preserved the Roth IRA intact — available for tax‑free withdrawals or inheritance.
  • Reduced the effective taxable income in the first RMD year via $20k in QCDs, which materially lowered provisional income and the portion of Social Security subject to tax.
  • Avoided a substantial IRMAA bracket by keeping AGI below the critical thresholds in the transition years; while exact savings depend on individual circumstances, the couple estimates saving roughly $2,000–$4,000 annually in combined Medicare surcharges and additional tax on Social Security in their first RMD year versus an uncoordinated approach.
  • Maintained flexibility: because the pension and delayed Social Security provided predictable income later, they could scale taxable withdrawals up or down without threatening their core cashflow.

Lessons and practical takeaways

  • Think in buckets and timelines. The Johnsons categorized funds as “floor” (pension), “guaranteed growth later” (delayed Social Security), “tax‑deferred” (401(k)/IRA), “tax‑free” (Roth IRA) and “taxable” (brokerage). Each bucket served a purpose in sequencing.
  • Use the pension deliberately. Even a modest pension can act like an annuity floor that enables tax timing elsewhere. Consider the start date and survivor options carefully — changing the start date shifts both guaranteed cashflow and taxable income timing.
  • Plan withdrawals before RMD age. Withdrawals from traditional IRAs and 401(k)s before age 73 give you control over taxable income in lower‑income years and can reduce long‑term tax drag without the complexity of conversions.
  • Use QCDs when appropriate. Qualified charitable distributions remain a straightforward tool to satisfy RMDs while excluding that amount from AGI — useful if your charitable goals align and you want to limit Social Security taxation or IRMAA exposure.
  • Preserve Roth assets for optionality. Keeping a Roth IRA untouched gave the Johnsons a flexible, tax‑free reserve for unexpected needs or later‑life spending without increasing RMDs.
  • Coordinate with annual tax projections. The payoff required annual tuning: taxable gains, required distributions and pension timing change year to year. Projecting AGI and provisional income every tax season is essential.

When this plan might not work

This approach is most effective when you have a reliable pension or other guaranteed income to act as a floor and when you can afford to delay Social Security. Households that lack a pension, have high early spending needs, or have lower charitable capacity may need different tactics, including carefully planned Roth conversions or annuity options — both outside the Johnsons’ chosen path.

Bottom line

The Johnsons’ case shows that managing RMDs and the tax effect on Social Security is often less about chasing complex tax strategies and more about sequencing: choose a stable income floor, fill gaps with taxable and modest tax‑deferred withdrawals before RMDs kick in, preserve tax‑free Roth reserves, and use QCDs to reduce AGI once distributions are required. For many retirees the coordination of pension start dates, IRA withdrawal sizing and Social Security timing is the practical, low‑friction path to smoother taxable income in retirement.