Required Minimum Distributions won’t touch my accounts for years — under current rules, RMDs start at age 73 (moving to 75 for people born in 1960 or later, under the SECURE 2.0 changes). So why am I calculating mine now, freshly retired and nowhere close to that age? Because the accounts that generate the RMD are growing every year between now and then, and the decisions I make in these earlier years directly shape how painful that first required withdrawal turns out to be.
Here’s the mechanic, stripped down: your RMD is calculated by taking your retirement account balance as of December 31 of the prior year and dividing it by a life-expectancy factor from an IRS table (the Uniform Lifetime Table, for most people). The percentage this represents starts around 3.7% of your balance at age 73 and climbs every year after, since the divisor shrinks as you age. The withdrawal is added to your taxable income for the year, whether you need the cash or not — and if you have multiple traditional IRAs, you calculate the RMD separately for each but can withdraw the total from any combination of them (401(k)s work differently and generally require separate withdrawals from each plan).
The number that actually got my attention: if a traditional IRA balance keeps growing between now and 73 — through market returns and any remaining contributions — the RMD isn’t calculated on today’s balance. It’s calculated on the balance at 72 (the year before your first RMD), which for most people is meaningfully larger than what’s sitting in the account today. A bigger balance means a bigger forced withdrawal, which means a bigger jump in taxable income in a single year, potentially pushing you into a higher tax bracket, triggering higher Medicare IRMAA surcharges two years later, and increasing the taxable portion of Social Security income you’re already receiving by then.
This is exactly why I’m treating the years between retirement and 73 as the window to influence that future number, mainly through two levers:
Roth conversions now, while my taxable income is lower than it was while working. Every dollar converted from a traditional IRA to a Roth IRA in these lower-income years is a dollar that won’t generate an RMD later — Roth IRAs have no RMDs during the original owner’s lifetime. I’m covering my specific conversion approach in a separate post, since it deserves its own space.
Understanding which accounts are even subject to RMDs. Traditional IRAs, SEP IRAs, SIMPLE IRAs, and most employer plans (401(k), 403(b), 457(b)) are all subject to RMDs. Roth IRAs are not, for the original owner. Roth 401(k)s, as of 2024 rule changes, are also no longer subject to RMDs during the owner’s life. Knowing which of my own accounts fall into which bucket changed how I’m thinking about which ones to draw down first versus let grow.
One practical note for anyone closer to 73 than I am: the deadline for your very first RMD has a quirk — you can delay it until April 1 of the year *after* you turn 73, but every RMD after that first one is due by December 31 of that year. Delaying the first one means you’d take two RMDs in the same calendar year, which can spike that year’s taxable income significantly. Most people are better off just taking the first one on the normal schedule instead of deferring it.
I’ll be honest that RMDs felt like a “future me” problem when I started retirement planning. They’re not. The account balance driving that future required withdrawal is being shaped by decisions happening right now.
There’s also a completely separate RMD regime for inherited IRAs that I had to learn wasn’t the same as my own future RMDs. If you inherit an IRA from someone other than a spouse, the SECURE Act generally requires the account to be fully depleted within 10 years of the original owner’s death, and recent IRS guidance has clarified that annual withdrawals may be required during that window in certain cases, not just a lump sum at the end. Spousal beneficiaries have more flexibility, including the option to treat an inherited IRA as their own. I mention this because it’s easy to lump “RMDs” into one mental bucket, when in practice the rules for your own future RMD and the rules for an account you’ve inherited from a parent are governed by different provisions entirely.
I’m not a tax advisor. RMD rules have changed materially in recent years (SECURE Act, SECURE 2.0) and may change again — confirm current rules and your specific required beginning date with a tax professional or directly via IRS Publication 590-B.
Frequently Asked Questions
At what age do Required Minimum Distributions start?
Under current rules, RMDs generally start at age 73, moving to 75 for people born in 1960 or later under SECURE 2.0.
Do Roth IRAs have Required Minimum Distributions?
No — Roth IRAs have no RMDs during the original owner’s lifetime, which is why converting traditional IRA funds to a Roth before RMDs begin can permanently shrink future required withdrawals.
Why does my account balance today matter for a RMD years away?
Your RMD is calculated on your account balance as of the prior year-end, so a larger balance by the time you turn 73 means a larger forced taxable withdrawal — decisions made well before then shape that eventual number.