For decades you are told to leave your retirement savings alone and let them grow. At a certain age, the government flips that advice and requires you to start taking money out, whether you need it or not. For traditional IRAs and 401(k)s, those required withdrawals now begin at age 73, and missing one triggers a stiff tax penalty. Knowing the age, the deadline, and the exception for Roth accounts can save a retiree from an avoidable and expensive mistake.
The age-73 rule and why it exists
These mandatory withdrawals are called required minimum distributions, or RMDs. As the IRS explains, under the SECURE 2.0 law the age at which RMDs must begin is 73, and it is scheduled to rise to 75 in 2033. The logic is straightforward: traditional retirement accounts were funded with pretax dollars, so the money has never been taxed. RMDs are how the government finally collects the income tax it deferred all those years, by forcing the account to be drawn down over your later retirement rather than passed on untouched.
The rule applies to traditional IRAs and most workplace plans like 401(k)s and 403(b)s. The amount you must take each year is based on your account balance and an IRS life-expectancy factor, so it grows as a percentage of the account as you age. If you have several traditional accounts, the calculation is done for each, though the IRA rules let you total your IRA requirements and take the combined amount from any one of them, which can simplify the paperwork.
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The penalty for missing one is steep
Skipping or shorting an RMD is one of the more painful mistakes in retirement, because the penalty is a percentage of what you failed to withdraw, not a flat fee. If you do not take the full required amount by the deadline, the IRS charges an excise tax of 25% on the shortfall. There is relief for honest mistakes: if you correct the error promptly within the window the rules allow, the penalty drops to 10%. Either way, this is a tax you pay on top of the ordinary income tax on the withdrawal itself, so the smart move is simply to take the RMD on time.
The withdrawal is also taxable income in the year you take it, which can nudge some retirees into a higher bracket or affect other calculations. Planning the timing, and sometimes spreading withdrawals thoughtfully, can soften that, but the one thing you cannot do is ignore the requirement.
The Roth IRA difference
Not every retirement account carries this obligation, and the exception is a meaningful planning tool. Roth IRAs have no required minimum distributions during the original owner’s lifetime. Because Roth contributions were made with money that was already taxed, the government is not waiting to collect income tax on them, so it does not force you to draw the account down. That means a Roth IRA can keep growing tax-free for as long as you live and can be left largely intact to heirs, unlike a traditional IRA that RMDs steadily empty.
This distinction is one reason some people convert part of a traditional IRA to a Roth before RMDs begin, accepting tax now in exchange for no forced withdrawals later. Whether that makes sense depends on your tax situation, but the core fact is simple: traditional accounts have RMDs, Roth IRAs do not. One more option can soften the tax bite even on a required withdrawal: a qualified charitable distribution lets those 70 and a half or older send money directly from an IRA to a charity, which can count toward the RMD while keeping that amount out of taxable income.
Timing your first withdrawal
There is a wrinkle in the first year. You generally must take your first RMD by April 1 of the year after you turn 73, but every RMD after that is due by December 31. Waiting until that April 1 deadline for the first one means taking two withdrawals in the same calendar year, the delayed first one and the current year’s, which can pile up taxable income. For that reason many retirees choose to take the first RMD in the year they turn 73 rather than deferring it. Mark the deadlines clearly, because the calendar is where costly slip-ups happen.
What retirees should do
If you are approaching 73 with a traditional IRA or 401(k), find out your required withdrawal amount and the deadline, and set a reminder so you never miss it, given the 25% penalty on any shortfall. Know that the age rises to 75 in 2033, that a promptly corrected miss drops the penalty to 10%, and that Roth IRAs are exempt for the original owner. Handled on schedule, an RMD is just a routine yearly step; handled carelessly, it is one of the most expensive avoidable penalties in the tax code.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
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