Knowledge Blast: The January RMD Trap for People Who Turned 73 Last Year
Why Waiting on Your First RMD Can Create Two in One Year
Required Minimum Distributions (RMDs)
Starting at age 73, most retirement account owners must withdraw a minimum amount each year and pay ordinary income tax on it. Missing an RMD carries a stiff penalty.
Required Minimum Distributions are the IRS's mechanism for eventually collecting taxes on pre-tax retirement savings. Traditional IRAs, 401(k)s, 403(b)s, 457(b)s, SEP IRAs, and SIMPLE IRAs are all subject to RMD rules. Roth IRAs are not — at least not during the original owner's lifetime.
SECURE 2.0 (enacted December 2022) pushed the RMD starting age from 72 to 73 for anyone who turns 72 after December 31, 2022. A further increase to age 75 is scheduled for 2033. If you turned 72 before 2023, you were already taking RMDs under the old rules and those continue unchanged.
The amount you must withdraw each year is calculated using your prior December 31 account balance divided by a life expectancy factor from the IRS Uniform Lifetime Table. The calculation is redone each year using the prior year-end balance and your updated age factor.
Key Concepts
Age 73 Trigger
RMDs begin in the year you turn 73. Your first RMD must be taken by April 1 of the following year. Every subsequent RMD is due by December 31 of that year. Delaying the first RMD creates a double-RMD year — two taxable distributions in the same calendar year.
The Calculation
RMD Amount = Prior December 31 Account Balance ÷ IRS Life Expectancy Factor. At age 73 the Uniform Lifetime Table factor is 26.5, meaning you'd withdraw roughly 3.8% of your balance. At 80 it's 20.2 (about 5%). Factors are published in Appendix B of IRS Publication 590-B.
IRA Aggregation Rule
If you have multiple traditional IRAs, calculate the RMD for each account separately — but you can withdraw the total combined amount from any one (or combination) of your IRAs. This does not apply to 401(k) accounts: each plan requires its own withdrawal.
Still-Working Exception
If you're still employed and participating in that employer's 401(k) (and own no more than 5% of the company), you can delay RMDs from that specific plan until you retire. This exception does not apply to IRAs or to 401(k)s from former employers.
Qualified Charitable Distribution (QCD)
If you're 70½ or older, you can direct up to $108,000 (2025) from your IRA directly to a qualified charity. The QCD counts toward your RMD but is excluded from taxable income — unlike taking the RMD then donating it. Especially valuable for people who don't itemize.
Missed RMD Penalty
The penalty for failing to take the full RMD is 25% of the shortfall (reduced from 50% by SECURE 2.0). If you correct the mistake within two years and meet certain conditions, the penalty drops to 10%. File Form 5329 to self-report and request a waiver for reasonable cause. Full breakdown: RMD Mistakes & Fixes.
Frequently Asked Questions
Do Roth IRAs have RMDs?
No — not during the original owner's lifetime. Roth IRA owners are never required to take distributions from their own account. However, inherited Roth IRAs are subject to RMD rules. Most non-spouse beneficiaries who inherit a Roth IRA after 2019 must empty the account within 10 years, even though the distributions are generally tax-free.
I turn 73 this year — when exactly is my first RMD due?
Your first RMD is due by April 1 of the year after you turn 73. If you turn 73 in 2025, your first RMD is due by April 1, 2026. However, delaying to April 1 means you also owe your second RMD (for 2026) by December 31, 2026 — two RMDs in the same tax year, which can push you into a higher bracket. Many people take the first RMD in the year they turn 73 to avoid this.
Can I take my RMD in installments throughout the year?
Yes. The IRS only cares that the total amount withdrawn by the deadline equals or exceeds your required minimum. You can take it monthly, quarterly, all at once — whatever works for your cash flow and tax planning. Just make sure the total for the year meets the threshold.
What if I take too little — or nothing at all?
The shortfall is subject to a 25% excise tax. Report this on Form 5329. To minimize the penalty, take the makeup distribution as soon as you discover the error and request a penalty waiver for reasonable cause — the IRS frequently grants these for first-time mistakes. The penalty drops to 10% if you correct the shortfall within two years.
Are RMDs taxable?
Yes — pre-tax RMDs from traditional IRAs and 401(k)s are fully taxable as ordinary income in the year received. They're reported on Form 1099-R. They can also push Social Security taxation higher (up to 85% of SS benefits become taxable), trigger Medicare IRMAA surcharges, and affect eligibility for certain credits.
If you made after-tax (non-deductible) contributions to a traditional IRA tracked on Form 8606, a pro-rated portion of each RMD is not taxable.
Can I convert my RMD to a Roth IRA?
No. RMDs cannot be converted to a Roth IRA. The IRS requires that your RMD be distributed first before any additional amounts can be converted. Once you've turned 73, the first dollars out of your IRA each year are treated as the RMD and cannot go into a Roth. Any additional withdrawal above the RMD can be converted.
Also on this site
Topic Guide
Roth Conversions
Converting pre-tax IRA money to Roth eliminates future RMD obligations on that money.
Topic Guide
Inherited IRA Rules
Inherited IRAs have their own RMD rules — significantly changed by the SECURE Act.
Topic Guide
Rollovers & Transfers
Rolling an old 401(k) into an IRA changes your RMD calculation starting at age 73.
RMD rules keep changing. Stay current.
SECURE 2.0 changed the RMD age, penalty rate, and more. The Rundown covers each update as it happens — in plain English.
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Education-only disclaimer
This guide is for general education and information only. It does not provide individualized investment, tax, or legal advice, and does not establish a client relationship. Always consult your own tax professional, financial advisor, or legal counsel before making decisions about your accounts or retirement strategy.