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As year-end approaches, some older Americans must soon take required withdrawals<\/a> from retirement accounts<\/a> \u2014 and there are several options if you don’t need the money, experts say.\u00a0<\/p>\n Most retirees must take required minimum distributions<\/a>, or RMDs, from pretax retirement accounts starting at age 73 or face an IRS penalty<\/a>. The first deadline is April 1 of the year after turning 73, and Dec. 31 is the due date for future years.\u00a0<\/p>\n But some retirees have “a lot of guaranteed income” before RMDs, or spend less than they have coming in, according to Judy Brown, a certified financial planner who works at C&H Group in the Washington, D.C. and Baltimore area.<\/p>\n More from ETF Strategist:<\/p>\n Here’s a look at other stories offering insight on ETFs for investors.<\/p>\n In 2024, Social Security was the most common source of retirement income.\u00a0But 81% of retirees<\/a> had one or more types of private income, such as pensions, investments, rental income or employment, according to a Federal Reserve report published in May.\u00a0\u00a0<\/p>\n When retirees have more than they need, there could be decisions about how to spend or reinvest their RMDs, experts say.\u00a0<\/p>\n “It can definitely impact a lot of people,” and the right choice depends on your financial needs and goals, said Brown, who is also a certified public accountant.<\/p>\n Here are some options to consider.<\/p>\n Reinvest with exchange-traded funds<\/p>\n If you still want long-term growth, you can reinvest RMD proceeds into a brokerage account. But you need to choose assets carefully because the account incurs yearly taxes, experts say.<\/p>\n Typically, experts suggest exchange-traded funds<\/a>, or ETFs, over mutual funds in a brokerage account because the assets are less likely to distribute capital gains or dividends throughout the year.\u00a0\u00a0<\/p>\n “It’s also easier for tax-loss harvesting<\/a>,” which involves selling a losing brokerage account asset to offset other portfolio gains, Brown said.\u00a0<\/p>\n Since ETFs trade throughout the day like a stock, you have more control<\/a> when selling specific assets, she said.<\/p>\n ‘Skip the tax bill’ with a transfer to charity<\/p>\n For charitable investors<\/a>, you could also consider a so-called qualified charitable distribution<\/a>, or QCD, experts say.\u00a0\u00a0<\/p>\n Open to retirees age 70\u00bd or older, QCDs are a direct transfer from an individual retirement account to an eligible non-profit organization. For 2025, the limit is $108,000 per investor.\u00a0\u00a0<\/p>\n Once you’re 73 or older, you can use QCDs to satisfy yearly RMDs and the transfer won’t increase your adjusted gross income.\u00a0<\/p>\n “It’s the IRS’ best-kept secret for retirees,” said CFP Ashton Lawrence at Mariner Wealth Advisors in Greenville, South Carolina. “Skip the tax bill and help a cause you believe in.”<\/p>\n Legacy planning with a 529 contribution<\/p>\n If legacy planning is important, you can also consider using RMDs to contribute to a 529 college savings plan<\/a> for your family, experts say.<\/p>\n