6 Retirement Account Decisions to Make in the Year You Turn 73
Sam's List Editorial | 2026-09-02
The first required minimum distribution is the only one you get to choose the timing of, and most people choose wrong by accident.
Everything after it runs on a December 31 deadline with no options. The year you turn 73 is different: you can take it that year, or you can wait until April 1 of the following year and take two distributions in one tax year. That single choice has consequences that show up on a Medicare bill two years later.
Here are the six decisions that cluster around your first RMD at age 73, and the deadlines attached to each.
First, Confirm Your Own Age
Under SECURE 2.0, the applicable age is 73 for anyone who reaches age 72 after December 31, 2022 and age 73 before January 1, 2033, and 75 for anyone who reaches age 74 after December 31, 2032. In practice that means age 73 for people born 1951 through 1958, and age 75 for people born 1960 or later.
People born in 1959 sit in a genuine gap in the statute, which literally satisfies both conditions. Treasury proposed treating the 1959 cohort as age 73 but reserved that piece in the final regulations. If you were born in 1959, do not take a blog's word for it, including this one. Confirm with a tax professional.
Statutory text: 26 U.S.C. 401(a)(9)(C)(v).
1. Take It This Year, or Stack Two Next Year
Your required beginning date is April 1 of the year following the year you reach 73. Every subsequent RMD is due December 31.
The IRS states the consequence plainly: if you wait, you will generally have two required distributions in the following year, one by April 1 and another by December 31.
Two RMDs in one calendar year means both are taxable income in that year. That can push you into a higher bracket, increase the taxable portion of Social Security, and trigger surcharges that a single distribution would not.
Deferring makes sense in a narrow case: if this year's income is unusually high and next year's will be much lower, moving the first distribution can be the right call. In most other situations, taking the first RMD by December 31 of the year you turn 73 spreads the income across two tax years, which is the point.
Source: IRS, Retirement topics - Required Minimum Distributions.
2. Understand That Medicare Is Watching, Two Years Behind
Medicare's income-related monthly adjustment amount, IRMAA, is set using the modified adjusted gross income from your tax return two years prior. Your 2026 Part B and Part D premiums are based on your 2024 income. If that return is not yet available, SSA may use the year before it.
The 2026 standard Part B premium is $202.90 per month. Above the first threshold, surcharges apply on top:
| 2026 MAGI, single | 2026 MAGI, married filing jointly | Part B surcharge | Part D surcharge |
|---|---|---|---|
| $109,000 or less | $218,000 or less | none | none |
| Over $109,000 to $137,000 | Over $218,000 to $274,000 | +$81.20 | +$14.50 |
| Over $137,000 to $171,000 | Over $274,000 to $342,000 | +$202.90 | +$37.50 |
| Over $171,000 to $205,000 | Over $342,000 to $410,000 | +$324.60 | +$60.40 |
| Over $205,000 to under $500,000 | Over $410,000 to under $750,000 | +$446.30 | +$83.30 |
| $500,000 or more | $750,000 or more | +$487.00 | +$91.00 |
Source: SSA, Medicare premiums.
These are cliffs, not phase-ins. One dollar over a threshold applies the entire surcharge for the year, per person. For a married couple, that is two surcharges.
Two practical points. First, the doubled-up RMD year is exactly the kind of event that pushes a household over a cliff, and you will not feel it for 24 months. Second, if you stopped working or reduced hours, that is a qualifying life-changing event and you can ask SSA to use current income instead by filing Form SSA-44. Taking a large RMD is not itself a life-changing event.
3. Decide Whether Some of It Should Go to Charity
If you give to charity anyway, a qualified charitable distribution is usually the most efficient way to do it once you are RMD-age.
The rules:
- Eligible at age 70 and a half, which is earlier than the RMD age. These are two different clocks.
- 2026 limit: $111,000 per person, up from $108,000 in 2025. A married couple where both spouses are 70 and a half or older and each has an IRA can do $222,000 combined.
- A QCD counts toward your RMD.
- It goes directly from the IRA to the charity and is excluded from income, rather than being an itemized deduction.
- One-time split-interest entity election for 2026: $55,000, which counts inside the annual cap, not on top of it.
Source: IRS Notice 2025-67.
Because a QCD is excluded from income rather than deducted, it lowers the MAGI that drives IRMAA. That is the part people miss.
Limitations: QCDs are IRA-only, not available from a 401(k) or 403(b), cannot be made from an ongoing SEP or SIMPLE IRA, and the exclusion is reduced by post-70 and a half deductible IRA contributions.
4. Know Which Accounts Can Be Combined and Which Cannot
This is a mechanical rule and getting it wrong creates a shortfall you will not notice.
- IRAs, including SEP and SIMPLE IRAs: calculate the RMD separately for each account, then take the total from any one of them or any combination.
- 401(k) and 457(b) plans: no aggregation. The RMD must be taken separately from each plan account.
- 403(b) contracts: calculate per contract, but you may aggregate across 403(b) contracts.
- Never across categories. An IRA distribution does not satisfy a 401(k) RMD, and inherited IRAs cannot be aggregated with your own.
Source: IRS, RMD comparison chart.
Someone with four IRAs and two old 401(k)s from prior employers has one aggregated IRA distribution and two separate plan distributions. Three transactions, not one.
5. Check Whether the Still-Working Exception Applies, and Whether Your Plan Allows It
If you are still employed past 73, the required beginning date for that employer's plan can be deferred to April 1 of the year following the year you retire.
Three limits, all of which matter:
- It never applies to IRAs, SEP IRAs, or SIMPLE IRAs.
- It does not apply if you are a 5% owner of the business.
- It only works if the plan document allows it. The IRS is explicit that a plan may require distributions at 73 even if you are still working.
And it only covers your current employer's plan. Old 401(k) balances from previous jobs are not sheltered, which is a common and expensive misunderstanding.
6. Revisit Any Assumption You Have About Roth Accounts
Roth IRAs have never been subject to lifetime RMDs.
Designated Roth accounts inside a 401(k), 403(b), or governmental 457(b) stopped being subject to lifetime RMDs for taxable years beginning after December 31, 2023, under SECURE 2.0 section 325.
If you rolled a Roth 401(k) to a Roth IRA years ago specifically to escape RMDs, that reason no longer applies. There may still be good reasons to consolidate, but the RMD argument is retired. Beneficiaries of both Roth IRAs and designated Roth accounts remain subject to distribution rules.
What One Missed Retirement Account Decision Costs
The excise tax on a missed RMD is 25% of the shortfall under IRC 4974, reduced from 50% by SECURE 2.0.
It drops to 10% if, during the correction window, you both take the shortfall distribution from the same plan and file a return reflecting the tax. Both conditions are required. The correction window runs to the earliest of a notice of deficiency, assessment of the tax, or the last day of the second taxable year beginning after the year the tax was imposed.
It is reported on Form 5329, and a waiver can be requested if the shortfall was due to reasonable error and you are taking reasonable steps to fix it. Attach a statement of explanation.
Getting a Second Opinion on These Retirement Account Decisions
Almost none of this is difficult individually. What makes it hard is that the decisions interact: the deferral choice changes the IRMAA outcome, the QCD changes the MAGI, and the aggregation rules change how many transactions have to happen before December 31.
Bull Oak is a San Diego, California advisory firm founded in 2014 whose stated client focus is pre-retirees roughly five to ten years out, retirees, and young professionals. That pre-retiree window is where this sequencing conversation belongs, because most of the useful moves happen before the first distribution is required rather than after.
The honest limitation: no advisor can change your required beginning date or your RMD amount, and no strategy here is guaranteed to lower your lifetime tax. What planning can do is decide which year income lands in, and that is a smaller claim than most retirement marketing makes.
You can compare advisors by location, specialty, and verified reviews in the Sam's List financial advisor directory.
Frequently Asked Questions
Should I take my first RMD by December 31 or wait until April 1? Waiting means two distributions land in the same tax year, which raises that year's taxable income and can trigger Medicare surcharges two years later. Taking the first one by December 31 of the year you turn 73 spreads the income across two years. Deferring mainly makes sense when the current year's income is unusually high and next year's will be materially lower.
What is the RMD age now? Age 73 for people who reach 72 after December 31, 2022 and 73 before January 1, 2033, which covers most people born 1951 through 1958. Age 75 for anyone who reaches 74 after December 31, 2032, generally those born 1960 or later. The 1959 birth year is unresolved in final regulations and should be confirmed individually.
Does a qualified charitable distribution count toward my RMD? Yes. A QCD counts toward the required minimum distribution, and because the amount is excluded from income rather than taken as a deduction, it also keeps that amount out of the modified adjusted gross income used for Medicare IRMAA. The 2026 limit is $111,000 per person.
What is the penalty if I miss an RMD? An excise tax of 25% of the amount not distributed, reduced to 10% if you take the missed distribution and file a return reflecting the tax within the correction window. It is reported on Form 5329, and a waiver may be requested for reasonable error with a written explanation attached.
About the author: Kimberly Green is the cofounder of Sam's List, where business owners and high earners find vetted CPAs, financial advisors, and fractional CFOs. She's met one-on-one with 400+ financial professionals and writes from the real data behind thousands of client-advisor matches. Ask her anything about finding an accountant - she's heard it all, including the questions people are afraid to ask.