If you turned 73 in 2024, the IRS has a message: your first Required Minimum Distribution is due by April 1, 2025 — and it is not a suggestion.
An RMD is the minimum amount you must withdraw each year from most tax-deferred retirement accounts, including traditional IRAs, 401(k)s, and 403(b)s.
The rule exists because you never paid income tax on that money going in.
Miss the deadline, and the penalty is steep: 25% of the amount you should have withdrawn, dropping to 10% if you fix the mistake within a correction window.
On a $30,000 missed distribution, that's up to $7,500 gone.
If you turned 73 last year, you can delay your very first withdrawal until April 1, 2025.
But that creates a trap: you'd still owe a second RMD for 2025 by December 31, 2025.
Two taxable withdrawals in one calendar year can push you into a higher bracket, inflate your Medicare Part B and Part D premiums, and increase the taxable portion of your Social Security benefits.
Roth IRAs are exempt during the owner's lifetime, which is why they remain a popular estate and tax-planning tool.
Roth 401(k)s also no longer require RMDs under rules that took effect in 2024.
The math matters more than most people realize.
RMDs are calculated by dividing your account balance at the end of the prior year by a life expectancy factor from IRS tables.
At 73, that factor is about 26.5, meaning roughly 3.8% of your balance comes out whether you need the cash or not.
If your balance grew 15% in a strong market year, your required withdrawal grows with it — and so does the tax bill.
Retirees who don't need the money often reinvest it in a taxable brokerage account, but that only shifts the tax problem, it doesn't erase it.
Financial planners say the real planning window is before 73, not after.
Strategic Roth conversions during lower-income years can shrink future RMDs and reduce the tax hit later.
Qualified charitable distributions let people 70½ and older send up to $105,000 per year directly from an IRA to charity, satisfying the RMD without adding to taxable income.
The mistake that trips up the most people is aggregation.
You can combine RMDs across multiple traditional IRAs and take the total from one account.
But 401(k)s must be calculated and withdrawn separately from each plan.
Inherited IRAs come with their own set of rules that tightened significantly under the SECURE Act.
If you're unsure whether you've satisfied your obligation, check with your custodian.
Most brokerages calculate RMDs automatically, but the responsibility for taking the distribution is yours, not theirs.
The bottom line: this is one deadline where inertia is expensive.
Final Thoughts
A few minutes with a calculator or an advisor now can save thousands in penalties and unnecessary taxes later — and for a growing wave of new retirees, that conversation is happening for the first time this year.