RMD age 73 retirement planning is the sort of phrase nobody grows up dreaming about. Then you hit your 60s, the retirement accounts finally look like real money, and suddenly the government would like a schedule for when that money starts coming back out.
That’s the part many late-career workers miss. They know required minimum distributions exist in the background somewhere, like property taxes or the weird fee on the cable bill. They don’t always know the age moved, the rules changed again, and a bad assumption can create a tax mess right when they were hoping life would get simpler.
So the useful question isn’t “Do RMDs exist?” Of course they do. The useful question is what the age-73 rule actually means if you’re still working, still saving, or trying to keep future withdrawals from turning into a larger tax bill than necessary. The good news is the rule isn’t mysterious. The bad news is retirement math still loves paperwork.
The New RMD Age 73 Retirement Planning Problem: The Rule Already Changed Once and Will Change Again
If you learned years ago that required minimum distributions started at 72, that information is already stale. Fidelity explains that SECURE Act 2.0 raised the RMD starting age from 72 to 73 effective January 1, 2023, and it will rise again to 75 in 2033 for people born in 1960 or later.
That matters because the rule now depends on when you were born, not just on the birthday cake itself. Someone who turned 72 in 2023, for example, did not have to take a first RMD that year. Under the new rule, that person waits until age 73, with a required beginning date of April 1 in the year after turning 73.
This is where late-career planning goes sideways. People keep an old rule in their head, then build withdrawal timing, tax withholding, and even Social Security assumptions around it. Retirement planning gets treated like a static checklist when it is really a moving target with legal updates attached.
The practical takeaway is simple: stop trusting the version of RMD rules you heard at a barbecue three years ago. Check the current age threshold, line it up with your birth year, and plan from there. Bureaucracy ages badly. Your assumptions shouldn’t.
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How Your RMD Is Calculated and What That Number Actually Means
The IRS doesn’t pull your RMD out of thin air. It uses a formula. According to the IRS, your required minimum distribution is your retirement account balance as of December 31 of the prior year divided by the distribution period from the Uniform Lifetime Table.
At age 73, that distribution period is 26.5. So if a traditional IRA ended the previous year at $500,000, the math is roughly $500,000 divided by 26.5, which produces an RMD of about $18,868.
That number isn’t a recommendation. It’s the minimum amount the IRS requires you to withdraw. You can always take more. You just can’t take less and still satisfy the rule.
This matters because a healthy account balance can produce a withdrawal that feels bigger than expected, especially if the market had a strong year. A half-million-dollar IRA doesn’t sound unusual anymore for someone who has been saving for decades. But the RMD attached to that balance isn’t pocket change either, and it lands on top of whatever else is happening in your tax life.
The IRS updates the life-expectancy tables periodically using mortality data, which means the divisor itself can change over time. That’s another reason not to treat an old spreadsheet like sacred text. The number is mechanical, but the implications are personal. Once mandatory withdrawals start, they can increase taxable income, affect Medicare premiums down the line, and force you to think about account balances in a less cozy way.
Call this retirement math with a metronome. It keeps ticking whether you feel like dancing or not.
What Happens If You Miss an RMD and Why the Penalty Is Less Brutal Than It Used to Be
Missing an RMD is still a mistake. It’s just no longer the kind of mistake that instantly feels like an IRS horror story told to scare interns.
Fidelity notes that SECURE 2.0 cut the penalty for a missed RMD from 50% of the amount not withdrawn to 25%. If you fix the problem within two years by taking the missed distribution and filing IRS Form 5329, that penalty can fall again to 10%.
That’s a real improvement over the old rule. Under the previous system, the 50% penalty could be waived only case by case, which meant more uncertainty layered on top of the mistake.
Still, “less bad” isn’t the same as “fine.” If you were supposed to take an $18,868 distribution and missed it, a 25% penalty is still painful, and even a 10% penalty isn’t the sort of donation anybody wants to make to administrative sloppiness.
The better framing is this: the system is less punitive now, but it still expects you to clean up the mess quickly. Take the missed distribution, file the form, and correct the record. Don’t sit there hoping the IRS got distracted by someone else’s yacht deduction.
This change should lower panic, not attention. That distinction matters. Fear makes people freeze. Clear rules make them act.
The Still-Working Exception: Helpful for Some 401(k)s, Useless for IRAs
This is one of the most common RMD misunderstandings, and it catches smart people because the phrase “still working” sounds broader than it is.
The IRS says the still-working exception can apply to employer-sponsored plans such as 401(k)s if you are still employed by the company sponsoring the plan, own no more than 5% of that business, and the plan itself allows the delay. In that case, you may be able to postpone RMDs from that specific plan until retirement.
But that exception doesn’t apply to IRAs. Traditional IRAs, SEP IRAs, and SIMPLE IRAs still require RMDs beginning at age 73 even if you are working full time, part time, or pretending the word “retirement” belongs to other people.
That split matters because plenty of late-career workers have both. They may still be contributing to a current employer plan while also holding older IRA balances from previous jobs. The 401(k) might qualify for a delay. The IRA doesn’t care about your work ethic, your office badge, or your refusal to become a Tuesday afternoon golfer.
So if you are still employed after 73, don’t stop at the comforting half-truth of “I can delay RMDs because I’m working.” Ask a narrower question: from which accounts? The answer may be yes for one plan and no for another, and the tax consequences show up quickly if you blur the two.
Strategies to Reduce the RMD Tax Hit Before It Arrives
The annoying part about RMD taxes is that most of the useful planning has to happen before the rule starts. Once mandatory withdrawals begin, your flexibility narrows.
That’s a problem because many retirees are improvising. Corebridge Financial reported in late 2025 that only 14% of retirees had a detailed strategy for managing required minimum distributions. That isn’t a tiny gap. That’s a giant field of people walking toward tax consequences with their shoelaces tied together.
One of the clearest tools is a Roth conversion before RMDs begin. Moving money from a traditional IRA into a Roth means paying tax on the conversion now, but future qualified growth in the Roth is tax-free, and Roth IRAs aren’t subject to lifetime RMDs for the original owner. The result is a smaller traditional balance later, which can reduce the mandatory withdrawal amount that eventually hits your tax return.
That doesn’t mean everybody should convert everything tomorrow morning. The point is to use lower-income years, partial conversions, or the years between retirement and age 73 to decide how much future tax pressure you want to drag around.
Qualified charitable distributions are another lever for people who give money away anyway. The IRS allows IRA owners age 70 1/2 and older to direct money to qualified charities, and those QCDs can count toward the RMD while staying out of taxable income. For 2026, the annual QCD limit is $111,000.
That matters because a charitable dollar sent directly from the IRA can do more tax work than a charitable dollar withdrawn first and donated later. Same generosity. Better plumbing.
The larger point isn’t that Roth conversions or QCDs are magic. Nothing in tax planning is magic. The point is that waiting until the first RMD notice arrives leaves fewer clean options. If only 14% of retirees have a detailed plan, then simply becoming part of the planning minority already puts you ahead of the crowd.
What Late-Career Workers Should Do in the Years Before 73
Awareness isn’t evenly distributed here, and that creates an opening for anyone willing to pay attention before the deadline arrives.
John Stevenson’s March 2026 Retirement Tax Surprise Index found that 58.9% of Americans earning under $25,000 had never heard of RMDs, and 51.5% of people with only a high school education were also unaware of the rule. Even among households earning $100,000 to $249,000, 15.4% were unaware. Stevenson also found that education level was the strongest predictor of awareness, while nearly 40% of Gen X respondents were entering retirement without meaningful tax preparation.
The lesson isn’t to feel superior because you read one article. The lesson is that most people don’t prepare for RMDs until the issue is already on the hood of the car.
Late-career workers should use the years before 73 for three specific jobs. First, map every retirement account you own and note which ones will trigger RMDs and which ones may qualify for the still-working exception. Second, estimate future withdrawal amounts using current balances so the eventual number doesn’t arrive like an ambush. Third, decide whether lower-income windows before age 73 are good years for Roth conversions or charitable planning.
This is also the time to coordinate the rest of the tax picture. Mandatory IRA withdrawals don’t happen in isolation. They sit next to wages if you are still working, next to Social Security if you already claimed, and next to any capital gains or other income that lands in the same year. A clean plan now can prevent a sloppier return later.
There is also a psychological advantage to handling this early. People who delay retirement planning often treat each rule change like a personal insult. It isn’t personal. It’s just a system that rewards attention. And if nearly 40% of Gen X is approaching retirement without serious tax preparation, attention is a cheaper edge than most financial products people get pitched.
Frequently Asked Questions
Can I withdraw more than my RMD from my IRA?
Yes. The RMD is the minimum, not the cap. You can always take more, but the extra amount doesn’t count toward a future year’s RMD.
Do Roth IRAs have RMDs for the original account owner?
No. Roth IRAs aren’t subject to lifetime RMDs for the original owner, which is one reason Roth conversions can reduce future mandatory withdrawals from traditional accounts.
If I have multiple IRAs, do I need to calculate an RMD for each one separately?
Yes, you calculate the RMD for each IRA separately. Under IRS rules, though, you can generally take the total amount from one IRA or split it across multiple IRAs, as long as the combined withdrawal satisfies the total requirement.
What is the deadline for taking my first RMD after turning 73?
Your first RMD is generally due by April 1 of the year after the year you turn 73. After that, annual RMDs are typically due by December 31 each year.
Does the still-working exception apply if I own more than 5% of my company?
No. The exception generally requires that you own no more than 5% of the business sponsoring the plan. If you exceed that threshold, the delay usually doesn’t apply.
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The Bottom Line
RMDs after 73 aren’t just a withdrawal rule. They are a tax-planning deadline hiding inside your retirement accounts. The people who handle them best usually do the boring work early, which is irritating but effective.
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Sources
- Fidelity: https://www.fidelity.com/learning-center/personal-finance/secure-act-2
- IRS, retirement topics on RMDs: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds
- IRS Publication 590-B: https://www.irs.gov/publications/p590b
- Corebridge Financial: https://investors.corebridgefinancial.com/news/news-details/2026/Only-28-of-Pre-retirees-and-Retirees-are-Comfortable-Drawing-Down-Savings-in-Retirement-But-Having-a-Plan-for-Decumulation-Boosts-Confidence/default.aspx
- John Stevenson: https://johnstevenson.com/retirement-tax-surprise-index/
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This article is for informational purposes only and is not financial advice. Consult a qualified professional for personalized guidance.
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