When you don't need the money, here's what to do with required withdrawals for retirees.

• Retirees approaching the deadline to withdraw funds from their retirement accounts have options if they don't need the money.
• From 2023, it is mandatory for most retirees to withdraw a minimum amount, known as RMDs, from their pre-tax retirement accounts when they turn 73 years old.
• If you have sufficient cash flow without RMDs, you may want to consider qualified charitable distributions or reinvesting the proceeds into brokerage accounts with tax-advantaged assets such as exchange-traded funds.

Experts suggest that retirees who don't require the funds from their retirement accounts have alternatives as the deadline for required withdrawals approaches.

Starting at age 73, retirees are mandated to withdraw a minimum amount from their pre-tax retirement accounts.

Judy Brown, a principal at SC&H Group and a certified financial planner and public accountant, stated that the next step in any financial plan always comes down to a client's personal goals, financial and tax plan.

Experts advise considering short- and long-term priorities, legacy goals, and tax implications before deciding on an RMD.

Reinvest for 'future tax savings'

To achieve long-term growth, you can reinvest after-tax RMD proceeds in a brokerage account and maintain your current investment strategy, advised Houston-based CFP Abrin Berkemeyer.

The tax rate for long-term capital gains from the sale of assets is 0%, 15%, or 20%, depending on taxable income.

Using brokerage assets for a large expense, such as health care, could lead to future tax savings, according to Berkemeyer, a senior financial advisor with Goodman Financial. However, pre-tax retirement funds are subject to regular income taxes.

ETFs are 'incredibly tax efficient'

There are "good reasons" not to keep identical assets in a brokerage account, which incurs yearly taxes on earnings, according to CFP Karen Van Voorhis, director of financial planning at Daniel J. Galli & Associates in Norwell, Massachusetts.

She said that holding stocks in exchange-traded funds is "incredibly tax efficient."

Unlike mutual funds, most ETFs do not distribute capital gains payouts, which can save brokerage account investors on annual taxes.

Secure a 'guaranteed tax deduction'

Another option for philanthropic individuals is a qualified charitable distribution (QCD), which involves a direct transfer from an individual retirement account to an eligible nonprofit organization.

In 2024, individuals aged 70½ and above can donate up to $105,000 to satisfy their yearly RMD requirements, provided they are 73 years old or older.

Retirees don't need to itemize tax breaks for QCDs since they don't count toward adjusted gross income and there's no charitable deduction.

"It's effectively a guaranteed tax deduction," Van Voorhis said.

An increase in adjusted gross income may result in higher income-related monthly adjustment amounts for Medicare Part B and Part D premiums.