If you turned 73 this year and have money sitting in a traditional IRA or 401(k), the IRS expects its cut.
Required minimum distributions, or RMDs, force retirees to pull a minimum amount out of tax-deferred accounts each year, whether they need the cash or not.
Miss the deadline and the penalty is a 25% excise tax on the amount you should have withdrawn, dropping to 10% if you fix it quickly.
The rule itself isn't new, but the confusion around it is.
The SECURE 2.0 Act pushed the starting age from 72 to 73 in 2023, and it climbs to 75 in 2033.
That staggered timeline has left plenty of people guessing which age applies to them.
Brokers say they field calls all year from retirees who aren't sure whether they're supposed to take a distribution or wait.
Here's the part that quietly stings: the first-year deadline isn't your birthday.
You must take your initial RMD by April 1 of the year after you turn 73.
Take it then, and you'll owe two distributions in the same calendar year, which can shove you into a higher tax bracket and inflate your Medicare premiums two years later.
Most financial planners suggest taking that first one on time in the year you turn 73 to avoid the pileup.
The IRS, obviously, since RMDs convert untaxed retirement savings into taxable income.
Custodians like Fidelity, Vanguard, and Schwab benefit too, because they automate the math and collect fees on the accounts.
And a growing cottage industry of advisors markets "RMD planning" as a premium service, even though the calculation is simple arithmetic on your prior year-end balance.
Each account needs its own distribution calculated, though you can usually pool withdrawals from multiple IRAs.
That flexibility does not extend to 401(k)s, which must be handled plan by plan.
Retirees with a handful of old workplace accounts often miss one and trigger a penalty without realizing it.
There's also a wrinkle for anyone still working past 73.
If your current employer's 401(k) allows it, you can delay RMDs on that specific plan until you retire.
That exception does not apply to IRAs or to old 401(k)s from former jobs.
Advisors say this is one of the most commonly misunderstood carve-outs, and getting it wrong tends to surface only after a penalty notice arrives.
Qualified charitable distributions let you send up to $105,000 per year directly from an IRA to a charity, and that money counts toward your RMD while staying out of your taxable income.
For retirees who already donate, it's one of the few genuinely useful levers in the tax code.
It requires the transfer to go straight from the custodian, not through your checking account.
If you've already missed a year, don't panic and don't ignore it.
The IRS has a correction procedure, and filing Form 5329 with a reasonable explanation often reduces the penalty.
The longer you wait, the harder that argument gets to make.
Our take: RMD rules aren't a scam, but the industry around them is oversold.
Final Thoughts
Automate the calculation with your custodian, take the distribution on time, and skip anyone charging a percentage of your nest egg to do basic math.