#7 Transfer IRA money to charity

Every year, taxpayers who are 72 years of age or older are allowed to donate up to $100,000 tax-free from a regular IRA straight to charity.

Since the payout counts as your necessary minimum distribution, it’s a wonderful bonus for IRA owners who are 72 or older. Additionally, a “qualified charitable distribution” may shrink your IRA’s size, lowering future necessary withdrawals as well as your rate of tax. Additionally, the transfer might lower the percentage of your Social Security payments that are taxed and help you maintain your income below the level at which you’re liable for the Medicare high-income premium.

If you choose to create a QCD, make sure to start it long before New Year’s Eve. The money must be removed from the account and the charity must pay the check by December 31st in order to be eligible for the tax deduction.

If you want to know which states WON’T tax your retirement income you should check out: Retirement Income Coming In? These 7 Reliable States WON’T Tax You