RMDs at 73 (and Beyond): What You Need to Know

RMDs at 73 (and Beyond): What You Need to Know

If you’re 73 or approaching that milestone soon, heads up: The IRS requires you to start taking annual withdrawals from qualified retirement accounts once you hit this age.



These withdrawals, known as required minimum distributions (RMDs), are the government’s way of saying “time’s up” on tax deferral. Since traditional retirement accounts are funded with pre-tax dollars and grow tax-free, the IRS eventually wants its share.

RMDs apply to most tax-deferred retirement accounts, including:

  • Traditional IRAs
  • SEP and SIMPLE IRAs
  • 401(k)s), 403(b)s and 457(b)s
  • Profit-sharing and other defined contribution plans

The notable exception? Roth IRAs, which are exempt since they’re funded with after-tax money.

Calculating RMDs

Your RMD amount changes annually based on your account balance at the end of the previous year, divided by a factor from the IRS Uniform Lifetime Table. Since these are taxable withdrawals, 100% of your RMD gets added to your total income for tax purposes.

If you must take RMDs from multiple IRAs, you can calculate each RMD separately but take the total amount from just one account. However, other retirement account types, like a 401(k), require separate withdrawals.

Taking your RMDs

Your first RMD has a grace period – you have until April 1 of the year after you turn 73. For example, if you turn 73 on Nov. 1, 2025, you have until April 1, 2026, to take your first RMD.

But here’s the catch: If you wait, you’ll need to take your second distribution by Dec. 31 of that same year. Taking two distributions in one year could potentially push you into a higher tax bracket.

All subsequent RMDs must be completed by Dec. 31. If you miss the deadline, you could face an IRS penalty of 25% of the required amount.

Smart strategies

Consider setting up automatic distributions monthly or quarterly to spread the tax impact and avoid year-end scrambles. If you’re charitably inclined, Qualified Charitable Distributions (QCDs) let you send RMDs directly to charity, potentially reducing your tax burden.

With the end of the year approaching, don’t wait to address your RMDs. Processing can take time, and the Dec. 31 deadline will be here quickly. We can help review your situation and establish a distribution strategy that works for your financial goals.

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