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Required Minimum Distributions at 73 or 75: Planning the Tax Impact Before They Start

Required distributions

A traditional IRA is a deferral, not an exemption, and required minimum distributions are the year the deferral ends. For a household with a few million dollars of tax-deferred savings, the first required distribution is often the largest single piece of income they have reported since they stopped working, and it arrives whether they need it or not.

Published September 11, 2026 by Flames Financial Planning. 10 min read.

Short answer: Distributions become mandatory at 73 for people born 1951 through 1959 and at 75 for those born in 1960 or later, with the first one due by April 1 of the year after the year you reach the applicable age. The amount is the prior year-end balance divided by an IRS life-expectancy factor, and it is taxed as ordinary income on top of Social Security, pensions and investment income. The tax impact is decided in the years before, by how much of the balance has been converted to Roth, how the rest of the portfolio is arranged, and, for charitable households, whether up to $111,000 a year of the distribution goes directly to charity.

The rules

When Required Distributions Begin, and What Happens If You Miss One

RuleWhat it saysSource
Starting age73 for people born 1951 through 1959; 75 for people born in 1960 or later. Anyone who reached 72 before 2023 is already taking them.Final RMD regulations, IRB 2024-33
First deadlineApril 1 of the year after the year you reach the applicable age. The second is due by December 31 of that same year, so waiting until April 1 puts two distributions in one tax year.IRS RMD FAQs
How muchThe account balance on December 31 of the prior year, divided by the life-expectancy factor for your age in the IRS Uniform Lifetime Table (a different table applies when a spouse more than ten years younger is the sole beneficiary).IRS RMD FAQs
Which accountsTraditional, SEP and SIMPLE IRAs (aggregated, so the total can be taken from any one of them), and each employer plan separately. Roth IRAs and designated Roth accounts in a 401(k) or 403(b) have no lifetime required distributions.IRS retirement topics: RMDs
Still workingA workplace plan can let you delay distributions from that plan until the year you retire, unless you own more than 5% of the business. The exception never applies to IRAs.IRS RMD FAQs
Missing oneAn excise tax of 25% of the amount not withdrawn, reduced to 10% if corrected within two years.IRS RMD FAQs

Two of these rules do most of the damage in practice. The April 1 deadline tempts people to defer the first distribution into the next calendar year, which then carries two distributions and often a bracket or a Medicare tier they would not otherwise have reached. And the aggregation rule means a household with several IRAs can take the whole required amount from the one that suits them, which is useful, while the separate-plan rule means an old 401(k) left behind at an employer has its own distribution that is easy to forget.

What it forces

What a Required Distribution Does to the Rest of the Return

A required distribution is ordinary income, and it lands on a return that usually already carries Social Security and investment income. An illustration, with round numbers and the standard deduction for a couple both over 65 ($35,500):

ItemAmountNote
Traditional IRA balance at the end of the year before turning 73$3,000,000The assumption in this example
First required distribution$113,208Balance divided by 26.5, the Uniform Lifetime Table factor at 73
Joint Social Security$72,00085% taxable at this income: $61,200
Interest and dividends$40,000From a brokerage account
Taxable income$178,908After the $35,500 standard deduction
Federal bracket reached24%The 24% bracket ends at $403,550 of joint taxable income in 2026
Medicare tier two years laterStandard premiumsMAGI about $214,408 against a first threshold of $218,000

Brackets and the standard deduction: IRS, tax year 2026 inflation adjustments (Rev. Proc. 2025-32). Medicare tiers: CMS, 2026 Medicare Parts A & B premiums and deductibles. Social Security taxation: IRS, Publication 915, Social Security and Equivalent Railroad Retirement Benefits. The life-expectancy factor is the IRS table figure; the balance and the other income are assumptions.

Nothing in that table was chosen. The couple did not decide to have $113,208 of income in the year they turned 73; the balance and the table decided it for them, and the factor falls each year, so the required percentage rises for the rest of their lives. What they could have decided, in the ten or fifteen years before, was the size of the balance the table would be applied to.

The required distribution itself is rarely the problem. The problem is that it stacks: on Social Security that becomes 85% taxable, on dividends that may now face the 3.8% investment tax, and on a Medicare premium set two years later by the same return.

Before they start

The Moves That Change the Outcome

The years between retirement and the required beginning age are the only period when income from tax-deferred accounts is optional. What is done in them sets the balance the table will be applied to.

  1. Convert to Roth while the bracket room exists. Every dollar converted before the required beginning age is a dollar that never appears in a required distribution, because Roth IRAs have none. The pacing question, how much and in which years, is worked through in how aggressive should Roth conversions be. The short version: fill the bracket you expect the distributions to push you out of, and watch the Medicare tiers.
  2. Spend from the IRA first, not last. The conventional order (taxable, then tax-deferred, then Roth) maximizes deferral and therefore maximizes the balance at 73. A household that expects large required distributions often does better drawing living expenses from the IRA in the early years, keeping taxable income level rather than low-then-high. Which account to draw from first works through it.
  3. Delay Social Security if the plan is to convert. Claiming at 70 rather than 67 raises the benefit by roughly 8% a year and keeps those years free of benefit income, which leaves more bracket room for conversions. The two decisions are made together.
  4. Move the growth to the Roth. Where assets sit changes how fast the tax-deferred balance grows. Holding bonds in the traditional IRA and stock funds in the Roth and brokerage accounts slows the growth of the account that will be forced out and speeds the growth of the ones that will not. This is asset location, in which investments belong in which account.
  5. Roll old employer plans into one IRA. Each employer plan has its own required distribution and its own paperwork; an IRA aggregates. The exceptions are a plan you still work for (which can defer) and any plan holding employer stock with a large unrealized gain, which may be worth handling separately.
  6. Know the balance that matters. The distribution is set by the December 31 balance of the prior year. A market decline in the following year does not reduce it; a large conversion in December does, for the year after.

Charitable households

Qualified Charitable Distributions: The Distribution That Never Reaches the Return

For a household that gives to charity, a qualified charitable distribution is the most efficient way to satisfy a required distribution, and it is available from age 70½, before required distributions even begin.

A qualified charitable distribution is a transfer made directly from an IRA to a qualifying charity. It counts toward the year's required distribution and is excluded from income entirely, up to $111,000 per IRA owner in 2026 ($108,000 in 2025; the limit is indexed). A one-time election also allows up to $55,000 to fund a charitable gift annuity or charitable remainder trust. Sources: IRS, Notice 2025-67 (2026 amounts relating to retirement plans and IRAs); IRS, Retirement plans FAQs regarding IRA distributions.

Excluded from income is better than deducted. A cash gift from a brokerage account is an itemized deduction, which most retirees no longer take because the standard deduction is larger, and even when itemized it reduces taxable income only. A qualified charitable distribution never enters adjusted gross income, so it also never counts toward the Medicare surcharge thresholds, the Social Security taxation formula or the investment-tax threshold. A couple who gives $30,000 a year and would otherwise take $30,000 more in taxable distributions is often better off by several thousand dollars a year for changing nothing but the route the money takes.

  • The transfer must go directly from the IRA custodian to the charity; a distribution to you that you then give is an ordinary distribution.
  • Donor-advised funds, private foundations and supporting organizations do not qualify as recipients, except through the one-time split-interest election.
  • It is available from 70½, so a household can start giving from the IRA before required distributions begin, shrinking the balance the table will later be applied to.
  • Deductible IRA contributions made after 70½ reduce the amount that can be excluded, so a working retiree who still contributes should check the interaction.
  • Employer plans do not offer it; money in a 401(k) has to be rolled to an IRA first.

After you

Inherited Accounts: The Ten-Year Rule

Required distributions do not end with the owner. What the heirs face is a large part of why the balance at 73 matters.

For an owner who dies after 2019, most non-spouse beneficiaries (adult children, most commonly) must empty the inherited account within ten years of the death. Under the final regulations that apply from 2025, when the owner had already reached the required beginning date, the beneficiary must also take annual distributions in years one through nine, based on their own life expectancy, and then the balance in year ten. A spouse, a minor child, a disabled or chronically ill beneficiary, or someone not more than ten years younger than the owner has other options. Sources: IRS, Retirement plan and IRA required minimum distributions FAQs; IRS, Notice 2024-35 (relief for certain 2024 required minimum distributions); IRS, Internal Revenue Bulletin 2024-33 (T.D. 10001, final required minimum distribution regulations).

The practical result is that a traditional IRA left to a child in their fifties is taxed at the child's rates, in the child's peak earning years, on a compressed schedule. A $2,000,000 inherited IRA drawn over ten years adds roughly $200,000 a year to the heir's income before growth. A Roth IRA passes under the same ten-year clock and adds nothing to the heir's taxable income, which is why the conversion decision is partly a decision about whose bracket the money is taxed in.

The three questions to settle before 73 are the same three: how much of the balance should be Roth by then, how much of the rest should already have been spent, and how much of what remains is going to charity. Everything else is arithmetic the table does for you.

Flames FP approach

How Flames FP Handles This

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FAQ

Common Questions

At what age do required minimum distributions start?

At 73 for people born 1951 through 1959 and at 75 for people born in 1960 or later. The first distribution is due by April 1 of the year after you reach that age, and the second by December 31 of that same year.

How is a required minimum distribution calculated?

The account balance on December 31 of the previous year is divided by the life-expectancy factor for your age from the IRS Uniform Lifetime Table. The factor falls each year, so the required percentage rises over time. A different table applies if your spouse is more than ten years younger and is the sole beneficiary.

Do Roth IRAs have required minimum distributions?

Not during the owner's lifetime, and since 2024 designated Roth accounts in a 401(k) or 403(b) are exempt as well. Beneficiaries who inherit a Roth IRA are generally subject to the ten-year rule, but the distributions are tax-free.

What is the penalty for missing a required distribution?

An excise tax of 25% of the amount that should have been withdrawn, reduced to 10% if the shortfall is corrected within two years. The IRS can waive it for reasonable cause when the shortfall is corrected and explained.

How much can I give to charity from my IRA?

Up to $111,000 per IRA owner in 2026 as qualified charitable distributions, from age 70½, transferred directly from the IRA to the charity. The amount counts toward the required distribution and is excluded from income entirely.

Should I take my first distribution in the year I turn 73 or wait until April 1?

Usually in the year you reach the age. Waiting until April 1 of the following year is allowed, but the second distribution is also due that year, so two distributions land on one return and can push you into a higher bracket or a Medicare tier. Deferring makes sense mainly when the first year's income is unusually high for another reason.

Keep reading

Related Reading

Primary sources

This article is educational and is not individualized tax, legal or investment advice. Thresholds, rates and premiums are revised every year; the figures here are for tax year 2026 as published by the sources above, and you should confirm the current year’s before acting on any of them. Advisory services are offered through Core Planning, LLC, a Registered Investment Advisor.