If you turned 73 last year, the IRS has a message for you: it wants a slice of your retirement account, whether you need the money or not.
Required minimum distributions, or RMDs, force you to withdraw a minimum amount from traditional IRAs and most 401(k)s each year once you hit a certain age.
Miss the deadline, and the penalty is brutal — 25% of the amount you should have taken, dropping to 10% if you fix it fast.
Here's the part that catches people off guard: the deadline for your first RMD isn't Dec. 31.
You get until April 1 of the following year.
Wait until April, and you'll have to take two withdrawals in the same calendar year — your delayed first one plus the current year's.
That can shove you into a higher tax bracket and even bump up what you pay for Medicare premiums.
Many retirees don't need the cash, so this feels like the government forcing a taxable event on money they'd rather leave invested.
But there's an angle worth understanding: the rule exists because these accounts were funded with pre-tax dollars.
The math isn't complicated, but the details shift.
Your RMD is generally your account balance at the end of the prior year divided by a life-expectancy factor from an IRS table.
As you age, the divisor shrinks, so the percentage you must pull grows.
At 73, it's roughly 3.8% of your balance.
The 2022 SECURE 2.0 law pushed the starting age from 72 to 73, and it's set to hit 75 in 2033.
If you're already taking distributions, nothing changes for you.
If you're on the cusp, your birth year decides which rule applies — and getting it wrong means either an unnecessary withdrawal or a penalty.
Where people really stumble is with multiple accounts.
Each IRA has its own RMD, but you can total them up and take the whole amount from one account if you want.
That flexibility doesn't extend to 401(k)s.
Each workplace plan must pay out separately.
Roth IRAs, notably, have no RMD during the owner's lifetime — one reason they've become a favorite tool for people who want to let money grow untouched.
There's also the qualified charitable distribution workaround.
Once you're 70½, you can send up to $105,000 per year (the figure adjusts with inflation) directly from an IRA to a charity.
It counts toward your RMD and keeps the money out of your taxable income.
For retirees who give anyway, this is often the single easiest tax move available.
Since the SECURE Act, most non-spouse heirs must drain an inherited IRA within 10 years.
The IRS has been issuing and revising penalty relief on this repeatedly, which tells you something: even the agency knows the rules are tangled.
Accountants, custodians, and tax software makers, mostly.
The rules generate fees and complexity that ordinary savers didn't ask for.
The IRS benefits too, collecting deferred taxes it was always owed.
The practical takeaway is unglamorous: know your number, calendar the deadline, and don't let the April grace period fool you into a double withdrawal.
Custodians usually calculate it for you, but the responsibility lands on you, not them.
My take: RMDs are less a wealth grab than a bill coming due, but the rollout and shifting ages have been needlessly confusing for the people least equipped to track them.
If you're near the threshold, one conversation with a tax pro is probably worth more than any article.
Final Thoughts
Just don't treat the April deadline as free extra time — it rarely is.