If you turned 73 this year, the government has a message that lands less like a birthday card and more like a bill: start withdrawing from your retirement accounts, or pay a penalty.
It's called a required minimum distribution, or RMD.
The rule applies to traditional IRAs, 401(k)s, and most other tax-deferred retirement plans.
You spent decades deferring taxes on that money.
The starting age used to be 70½, then 72, and now it's 73 for most people under the SECURE 2.0 law.
Miss the deadline and the penalty is steep: 25% of the amount you should have withdrawn, dropping to 10% if you fix it quickly.
For your first RMD, you get until April 1 of the year after you turn 73.
Take that first-year extension and you'll stack two taxable withdrawals into a single tax year, which can shove you into a higher bracket or trigger higher Medicare premiums.
You divide your account balance from the prior December 31 by a life expectancy factor from IRS tables.
At 73, that factor is about 26.5, so a $500,000 balance means roughly $18,900 must come out.
The older you get, the larger the percentage.
Roth IRAs have no RMDs during the owner's lifetime.
If you're still working and don't own more than 5% of the company, your current employer's 401(k) may be exempt until you retire.
And if you have several traditional IRAs, you can total the RMDs and take the money from just one — but 401(k)s each stand alone and can't be pooled.
Here's where it connects to your grocery bill.
An RMD is taxable income, and taxable income is what the government uses to decide what you pay.
A bigger forced withdrawal can raise your monthly Medicare Part B and Part D premiums two years later through income-related adjustment amounts.
It can also shrink what you keep from Social Security and push capital gains into a higher rate.
Most people don't need the cash and would rather leave the account alone.
The practical move is to calculate the number in January, not December.
If you don't need the money, a qualified charitable distribution can send up to $105,000 per year directly to charity and count toward your RMD while staying out of your taxable income.
Withholding taxes from the distribution is another way to avoid a surprise in April.
The mistake that costs the most is simple silence.
Custodians don't always flag the deadline, and if you hold accounts at three different firms, it's on you to add them up.
Set a calendar reminder for early December.
Confirm the math with your plan administrator or a tax professional.
Then take the withdrawal, even if you just move it to a regular brokerage account.
But an RMD is one of the few retirement deadlines that punishes you for doing nothing, and the penalty is far larger than any grocery price swing you've complained about this year.
Final Thoughts
Check your age, check your balance, and check the calendar before the IRS checks on you.