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For Retirees Ages 73 to 75

Required Minimum Distributions (RMD): What You Must Know in Your First Three RMD Years

If you recently turned 73, your first RMD deadline is approaching. A missed withdrawal, a miscalculation, or poor timing can cost you thousands in avoidable taxes and IRS penalties. Here is what to do and when to do it.

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What Your First RMD Actually Costs Without a Plan

Most retirees at age 73 take their first RMD without any planning and pay far more in taxes than necessary. To illustrate the impact of proper RMD planning, let us assume a retiree aged 73 with a traditional IRA balance of $1,200,000 and Social Security income of $36,000 per year.
Without RMD Planning
Taking the Mandatory Minimum in December With No Strategy

$14,820

You take the full RMD of $46,729 in December without planning. It stacks on top of your Social Security income, pushes 85% of your benefits into taxation, and bumps a portion of your income into the 22% bracket. No charitable offset, no Roth conversion, no bracket management. You pay the full bill.
With Structured RMD Planning
QCDs, Early Timing, and Bracket Management Applied

$7,400

You direct $10,000 of your RMD to charity as a qualified charitable distribution, satisfying that portion tax-free. A prior Roth conversion reduced your IRA balance, lowering this year's required amount. You take the distribution in January, allowing proper estimated payment planning. Result: less than half the tax bill.
Based on a $1,200,000 IRA balance at age 73 with $36,000 Social Security income | Illustrative example only
Metric Unplanned Withdrawal Planned RMD Strategy
IRA Balance (Start of Year) $1,200,000 $1,200,000
Required Minimum Distribution $46,729 $46,729
QCD Offset Applied $0 $10,000
Taxable RMD Amount $46,729 $36,729
Taxable Social Security $30,600 (85%) $22,320 (62%)
Federal Income Tax Owed $14,820 $7,400
Potential Annual Tax Savings:
$7,400+

Four RMD Traps That Catch New Retirees Off Guard

The years between 73 and 75 are when most RMD errors happen. You are navigating your first or second distribution cycle, potentially managing multiple accounts, and your decisions now set the pattern for every year that follows. These four situations require immediate attention.
⚠ First-Year Deadline Risk

The April 1 First-Year Extension and the Double Withdrawal Trap

If you turned 73 last year, you have until April 1 of this year to take your first RMD. However, your second RMD is still due by December 31 of the same year. Taking two full distributions in one calendar year can significantly spike your income, push more of your Social Security benefits into taxation, and trigger higher Medicare premiums the following year.
⚠ Aggregation Error

Combining IRA and 401(k) RMDs the Wrong Way

If you hold multiple traditional IRAs, you can total the required distributions and withdraw from any single account. But this flexibility does not extend to 401(k) plans. Each 401(k) requires its own separate RMD calculation and withdrawal. Retirees at 73 to 75 who consolidate incorrectly often end up with an underpayment that triggers the excise penalty without realizing it.

 
⚠ Medicare Impact

How a Large RMD Can Raise Your Medicare Premiums

Medicare Part B and Part D premiums are based on your modified adjusted gross income from two years prior. A large unplanned RMD this year can push you into a higher IRMAA surcharge tier in two years, adding hundreds to your monthly premiums. For retirees at 73 to 75, this is one of the most overlooked secondary costs of poor distribution timing.
⚠ Social Security Impact

RMD Income That Makes More of Your Social Security Taxable

Once your combined income crosses $34,000 as a single filer or $44,000 as a couple, up to 85% of your Social Security benefits become taxable. An unplanned RMD layered on top of existing income can silently cross these thresholds. At ages 73 to 75, most retirees are already receiving Social Security, which makes bracket management around RMD timing especially important.

Your RMD Compliance Checklist Before Your Next Distribution

Getting your RMD right in your first three years sets the foundation for the rest of your retirement. Here is everything you need to confirm before you take your next distribution.
5 / 5 Items to Verify Before Your Next RMD

Confirm Which of Your Accounts Require a Distribution

Traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k), 403(b), and 457(b) plans all require distributions starting at age 73. Your Roth IRA does not. If you hold an inherited IRA in addition to your own accounts, that balance follows a separate set of rules and needs to be calculated on its own.

 

Recalculate Your RMD Amount Every Year
Your required distribution changes annually because both your account balance and the IRS life expectancy factor change each year. The amount you withdrew last year is not a reliable guide. Always recalculate using your December 31 account balance from the prior year.
Consider a Qualified Charitable Distribution Before December 31

If you are charitably inclined, directing up to $105,000 from your IRA to a qualifying charity through a qualified charitable distribution counts toward your RMD and is fully excluded from taxable income. At ages 73 to 75, this is one of the most tax-efficient moves available to you each year.

Check Whether Your First-Year Double Distribution Applies
If you turned 73 last year and deferred your first RMD to April 1 of this year, you will owe two distributions this calendar year. Plan both distributions in advance to minimize the combined tax impact on your Social Security and Medicare costs.
Review Whether a Partial Roth Conversion Still Makes Sense
At ages 73 to 75, converting a portion of your traditional IRA to a Roth reduces your future RMD amounts and creates a pool of tax-free income. The window for favorable conversions is narrower now, but it may still apply if your current bracket is lower than expected future rates.
Quick Eligibility Snapshot
Requirement Criteria
Traditional IRA Yes, starting at age 73
SEP IRA Yes, starting at age 73
SIMPLE IRA Yes, starting at age 73
401(k) / 403(b) / 457(b) Yes, unless still working
Roth IRA (owner) No, exempt during lifetime
Inherited Roth IRA Yes, 10-year rule applies
Inherited Traditional IRA Yes, 10-year rule for most

Get Your RMD Strategy Right Before It Costs You.

Retirees between 73 and 75 face the highest risk of overpaying on their distributions. A one-hour review with our team can protect your bracket, reduce your Medicare exposure, and set a withdrawal plan that works for every year ahead.
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Questions We Hear Most from Retirees Starting Their RMDs

What are Required Minimum Distributions (RMD)?
Required Minimum Distributions are the minimum amounts you must withdraw each year from certain retirement accounts. These rules apply once you reach a specific age set by the IRS. They ensure retirement savings are eventually taxed.
RMDs generally start at age 73 under current tax laws. You must begin withdrawing funds from eligible retirement accounts at this age. Delaying beyond the deadline can lead to penalties.
RMDs are calculated using your account balance from the previous year and IRS life expectancy tables. The calculation determines the minimum amount you must withdraw. Financial advisors often help simplify this process.
Missing your RMD deadline can result in a penalty of up to 25% of the amount not withdrawn. This makes timely withdrawals very important. You may request penalty relief in certain cases.
Yes, you can withdraw more than the required amount at any time. However, extra withdrawals do not count toward future RMDs. They may also increase your taxable income for the year.
Disclaimer: The information on this page is for general educational purposes only and does not constitute tax advice. Every tax situation is unique. Consult a qualified tax professional before making decisions based on this content.