If you are turning 73 this year, this message is for you. The IRS may require you to take your first Required Minimum Distribution (RMD) from pre-tax retirement accounts, such as a Traditional IRA. Missing an RMD can lead to costly penalties—so it’s important to plan ahead.
What Is a Required Minimum Distribution (RMD)?
A Required Minimum Distribution (RMD) is the minimum amount the IRS requires you to withdraw each year from certain retirement accounts once you reach the required age. RMDs apply because these accounts are generally funded with pre-tax dollars, meaning withdrawals are typically taxable income.
Who Needs to Take an RMD at Age 73?
If you’re turning 73 this year, you may need to start RMDs from pre-tax retirement accounts, including:
- Traditional IRA (including rollover IRAs)
- SEP IRA and SIMPLE IRA
- Many employer plans like 401(k), 403(b), and 457 plans (plan rules may differ)
Roth IRAs generally do not require RMDs for the original owner.
First RMD Deadline: Don’t Get Caught Off Guard
Your first RMD has a specific deadline, and there may be a timing choice that affects your taxes. In some cases, delaying the first RMD can cause two RMDs in one calendar year, which may increase taxable income.
What You Need to Do (and How Jacobs Financial Helps You Navigate RMDs)
If you’re turning 73 this year, the best next step is to review your accounts now. Jacobs Financial is here to help you navigate your RMD so it’s handled correctly and on time. We can help you:
- Confirm which retirement accounts require an RMD
- Calculate your required minimum distribution amount
- Choose the best timing to help reduce tax surprises
- Plan tax withholding (since RMDs are usually taxable)
- Make sure everything is completed by the IRS deadline to help avoid penalties
If you’re turning 73 this year, contact Jacobs Financial to review your retirement accounts and create an RMD plan that fits your goals.
RMD FAQ (Quick Answers)
Do I have to take an RMD from a Traditional IRA?
If you’re turning 73 this year, yes—most Traditional IRA owners must begin RMDs.
Do Roth IRAs have RMDs?
Not for the original owner (in most cases). Inherited Roth IRAs can be different.
Are RMDs taxable?
RMDs from pre-tax accounts are typically treated as taxable income.
