When and How to Take Required Minimum Distributions (RMDs)

Authored By: Travis Evans, CFP®

For many retirees, accounts like IRAs and 401(k)s have been the backbone of their savings. At some point the IRS requires you to begin drawing from those accounts. These withdrawals, known as Required Minimum Distributions or RMDs, are not optional. The rules around when they begin have shifted in recent years, and understanding those changes can help reduce taxes and keep your retirement income steady.

When RMDs Begin

The starting age for RMDs has changed several times in just the past few years. Before 2020, retirees had to begin taking distributions at age 70½. The SECURE Act of 2019 raised that age to 72. The SECURE 2.0 Act of 2022 raised it again, but in stages.

If you were born between 1951 and 1959, your RMDs begin at age 73. If you were born in 1960 or later, the new starting age is 75 beginning in 2033. Today’s retirees in their early seventies will face one set of rules, while younger generations will have a few more years before RMDs kick in.

You can delay your first RMD until April 1 of the year after you reach your starting age. If you do, you will have to take two withdrawals in that year, the delayed “first” and the regular “second.” That can push you into a higher tax bracket, so the timing deserves careful thought.

How RMDs Are Calculated

The formula is simple. The IRS looks at the value of your retirement accounts on December 31 of the previous year, then divides that balance by a life expectancy factor from their published tables. As you age, the factor shrinks, which means the required withdrawals grow larger.

Most tax-deferred accounts fall under the RMD rules, including traditional IRAs, SEP IRAs, SIMPLE IRAs, and employer plans such as 401(k)s and 403(b)s. Roth IRAs are not subject to RMDs during the account owner’s lifetime. Beginning in 2024, Roth 401(k) and Roth 403(b) accounts also no longer require lifetime RMDs, which makes them consistent with Roth IRAs.

Minimizing the Tax Impact

Every RMD is taxed as ordinary income, so the way you handle them can make a difference in your overall tax bill. Coordinating your withdrawals with other income sources such as Social Security or pension benefits may help you avoid moving into a higher bracket.

For those with charitable intentions, Qualified Charitable Distributions can be powerful. Starting at age 70½, you can direct up to $108,000 in 2025 (the amount is indexed each year) straight from your IRA to a qualified charity. The distribution counts toward your RMD but does not appear as taxable income.

Another strategy is to consider Roth conversions before you reach RMD age. Once RMDs begin, you cannot convert the required amounts, but in the years leading up to it partial conversions may shrink your tax-deferred balances and reduce future RMDs. And if you are still working past traditional retirement age, some employer plans allow you to postpone RMDs until after retirement, provided you do not own more than 5 percent of the company.

Why It Matters

For those born in 1960 or later, the higher starting age of 75 creates extra years of tax-deferred growth and more time for planning. But postponing withdrawals can also mean larger account balances later, which in turn leads to larger required distributions. That could create higher taxable income in your mid seventies and beyond.

Anyone approaching age 73 today faces immediate decisions about timing, coordination with other income, and whether to use charitable or Roth conversion strategies to manage the tax impact.

The Bottom Line

RMDs are not simply a government requirement. They are a chance to align your tax strategy with your retirement goals. The rules have changed, and they matter differently depending on your birth year.

We can help you make the most of your RMDs this year so you can keep your retirement on track.