Ugly deformation for wrist and shoulder with IK New here.

I've been implementing some basic IK stuff for a rig of mine. The arms, the legs, etc. Overall I'm happy with how it's been going, but there is a problem.

Whenever I go to push the rig's arms into a more complicated position (in this case, a casual "hands on hips" sort of pose) I end up with some very twisty deformation at the wrists and shoulders.





There's an option to "preserve volume" for the mesh on the armature modifier, and that would be a decent enough band-aid except I need to export the model into Unreal Engine, which won't accept modifiers.

I think this might be a common issue for newbs like me, but I haven't found a clear solution online yet. Hopefully someone here has some suggestions! Any help is appreciated.

EDIT: Here's a PasteAll link to the .blend file if anyone wants to take a direct look: Blend File Link.
Similar to L0Locks answer an alternative is to add a copy rotation modifier with 50% influence to the next bone up the chain. By setting the influence to 50% the rotation will blend with the rotated target bone providing a smoother transition. Definitely not perfect but good for a quick fix. Note: you may have to play with the axis invert setting depending on your rigs orientation.