Don't Want to Take Required Minimum Distributions (RMDs)? Here Are 3 Ways to Get Out of Them.

There's a reason it can be very tempting to save for retirement in a traditional IRA or 401(k) plan. These accounts allow your money to go in on a pre-tax basis, helping you lower your IRS bill during your working years.

But because you get a tax break on traditional IRA or 401(k) contributions, the IRS imposes certain rules on those accounts. For one thing, if you tap a traditional IRA or 401(k) plan before age 59 1/2, you'll face a 10% early withdrawal penalty unless you qualify for an exception.

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The IRS also forces people with a traditional retirement plan to start withdrawing their money eventually. Those forced withdrawals are known as required minimum distributions, or RMDs, and they can be a huge pain if you don't need the money.

It may be that you have enough income in retirement between Social Security and outside investments that you don't have to take distributions from your IRA or 401(k). In that case, all RMDs do is create a tax headache for you.

The good news, though, is that there are a few ways you can get out of taking RMDs. Here are some options to look at if you don't like the idea of having to remove funds from your retirement savings because the IRS says you have to.

1. Do a Roth conversion

One nice thing about Roth IRAs is that they do not force you to take RMDs. They also allow you to withdraw money tax-free in retirement.

If you convert a traditional retirement account to a Roth, you can get out of RMDs. The only catch is that your conversion will count as taxable income. For this reason, Roth conversions need to be timed carefully.

If you have a large amount of savings and you convert all of it to a Roth IRA in a single year, it could result in a massive tax bill. You may want to work with a tax professional or financial advisor to gradually convert your savings to a Roth IRA ahead of retirement, or even during retirement, in a manner that minimizes the tax blow.

2. Donate to charity -- the right way

If you don't want to see your taxes increase due to being on the hook for an RMD, a qualified charitable distribution, or QCD, is a good way to avoid that hassle. With a QCD, you give your RMD to charity, which gets you out of paying taxes on that sum.

However, you must make sure that your RMD is sent to a qualifying charity directly for it to count as a QCD and eliminate your tax burden in the process. If you take a withdrawal and then write a charity a check, it won't achieve the same goal.

3. Continue working

If you're still working at the time you become liable for RMDs, you may be able to get out of taking them, provided you own less than 5% of the company you're employed by. So if you're inclined to keep working part-time to stay busy and boost your retirement income, it could be a great way to avoid RMDs.

That said, this exemption only applies to your current employer's retirement plan. If you have other retirement accounts that are subject to RMDs, you'll still need to take those to avoid being penalized.

It pays to know the rules

RMDs can be a frustrating thing to deal with when you don't need the money and would rather not have to remove it from your retirement account. But the silver lining is that there are strategies you can use to get out of RMDs.

If these strategies won't work for you, though, know that while you may not be able to escape RMDs and the taxes they inevitably trigger, there's no rule saying you have to spend the money. You could reinvest it in a brokerage account, start a CD ladder, or fund a 529 plan for your grandchildren.

You may also find that even if you don't need your RMDs, those withdrawals can serve as bonus money for you to spend. As long as you plan carefully for the associated tax bill, having to actually take your RMDs may not be so bad.

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