Turning 73 comes with a paperwork surprise that catches thousands of Americans off guard every year.
It's called a required minimum distribution, or RMD, and it forces you to pull money out of certain retirement accounts whether you need the cash or not.
The rule applies to traditional IRAs, 401(k)s, and most other tax-deferred workplace plans.
Roth IRAs are the big exception — they don't require withdrawals during the owner's lifetime.
If you've spent decades letting that money grow untaxed, the IRS now wants its cut.
Miss an RMD and the penalty is 25% of the amount you should have withdrawn.
That drops to 10% if you fix it within a two-year correction window, but it's still real money vanishing for a clerical oversight.
The math isn't something you can eyeball.
Your RMD is generally your account balance at the end of the prior year divided by a life expectancy factor from IRS tables.
Markets swing, balances change, and the divisor shifts as you age, so the number is different every single year.
Your very first RMD can be delayed until April 1 of the year after you turn 73.
Sounds like a gift — until you realize that means taking two distributions in the same calendar year, which can push you into a higher tax bracket or inflate your Medicare premiums.
Every year after that first one, the deadline is December 31.
If you're still working and contributing to a 401(k) at your current job, you may be able to skip RMDs on that specific plan.
But that exception usually doesn't cover older 401(k)s from former employers, and it never applies to traditional IRAs.
Many brokerages will calculate your RMD automatically, but you still have to request the withdrawal — they won't just send it.
If you have multiple IRAs, you can take the total from one account, but 401(k)s each have to be handled separately.
For people who don't need the money, a qualified charitable distribution lets you send up to $105,000 per year directly to charity, which can satisfy the RMD and keep the amount out of your taxable income.
That option has quietly become one of the more useful tools for retirees who are charitably inclined.
The simplest defense is a calendar reminder set for early December, not late December.
Give yourself a buffer for processing delays, because a check that arrives in January counts for the wrong tax year.
Also worth checking: whether your account is set up for automatic distributions.
Many custodians offer it, and it removes the human error risk entirely.
If you inherited an IRA from someone who wasn't your spouse, the rules tightened a few years ago and the timeline can be as short as ten years.
Those accounts often require annual withdrawals too, and the details depend on whether the original owner had already started taking theirs.
When in doubt, a single conversation with a tax professional costs far less than a 25% penalty.
The rules aren't complicated on purpose, but they are unforgiving to anyone who forgets. **The bottom line:** RMDs are one of the few retirement rules with a genuine penalty attached, so treat the deadline like a bill you can't ignore.
Final Thoughts
Set the reminder, confirm the amount, and take the withdrawal early enough that nothing goes wrong at the last minute.