Secure 2.0 RMD Rules at Age 73: What You Need to Know

When Required Minimum Distributions Now Begin

The SECURE 2.0 Act changed when many retirees must start taking required minimum distributions, known as RMDs, from traditional IRAs and most employer retirement plans such as 401(k) and 403(b) accounts.

For people born from 1951 through 1959, the law sets the RMD starting age at 73, meaning you generally must take your first required withdrawal for the calendar year you turn 73.

For those born in 1960 or later, the RMD age rises further to 75 starting in 2033, giving younger retirees a couple of additional years before forced withdrawals begin.

Your first RMD is due by April 1 of the year after you reach your required starting age, but all subsequent RMDs must be taken by December 31 each year, so delaying the first one means taking two distributions in a single tax year.

How to Calculate Your Annual RMD

The IRS requires that you calculate an RMD separately for each traditional IRA or employer plan by dividing the account's prior December 31 balance by a life expectancy factor from the IRS Uniform Lifetime Table.

For a 73-year-old using the current Uniform Lifetime Table, the distribution period is 26.5 years, so you divide your prior year-end account balance by 26.5 to find that year's required withdrawal.

As a practical example, if your traditional IRA balance was 265,000 dollars on December 31 of last year, your RMD for the current year would be approximately 10,000 dollars before any tax withholding.

The IRS allows you to total RMDs across multiple traditional IRAs and take the combined amount from any one or more of those accounts, but 401(k) plans generally require a separate calculation and withdrawal from each employer plan.

Key insight: Your RMD is simply your prior year-end balance divided by an IRS life expectancy factor — as both your account balance and your age change each year, your required withdrawal amount will also change.

What Happens If You Miss an RMD

Before SECURE 2.0, failing to take a full RMD triggered a penalty equal to 50 percent of the shortfall — one of the steepest penalties in the tax code.

Starting in 2023, SECURE 2.0 reduced that penalty to 25 percent of the missed amount, and it can drop further to 10 percent if you correct the mistake within the IRS correction window and file an amended return.

Even at the reduced rate, missing an RMD on a 10,000 dollar distribution could cost 2,500 dollars in penalties on top of the income tax owed, so setting calendar reminders and coordinating with your financial institution well before year end is strongly advised.

If you realize you have missed an RMD, contact a tax professional promptly — the IRS has historically been willing to waive penalties for first-time mistakes made in good faith, especially when you correct them quickly.

How Roth Accounts Are Treated Differently

Traditional IRAs and most employer plans are subject to RMD rules, but Roth IRAs owned by the original account holder are not subject to required minimum distributions during the owner's lifetime.

SECURE 2.0 also removed pre-death RMDs for designated Roth accounts in 401(k), 403(b), and certain governmental 457(b) plans starting in 2024, so those Roth balances can generally continue to grow without forced withdrawals while you are alive.

Because Roth accounts are free of RMDs for the original owner, some retirees choose to spend from traditional accounts first once RMDs begin and preserve Roth balances for later years or for heirs who may benefit from the tax-free growth.

The best strategy depends on your tax bracket, Social Security income, and estate goals, so discussing Roth versus traditional withdrawal sequencing with a tax-aware advisor can add significant value.

Planning Ahead Before RMDs Begin

If you were born between 1951 and 1959, you face RMDs starting at 73, which means thinking now about how those mandatory withdrawals will interact with your Social Security income and tax bracket.

One common preparation strategy is to make partial Roth conversions or take extra voluntary withdrawals in low-income years before RMDs start, reducing the future balance that will be subject to required withdrawals.

By understanding when your RMDs begin, how they are calculated each year, and the consequences of missing them, you can build a coordinated income plan that avoids unnecessary taxes and penalties throughout retirement.