If You Turn 73 in 2026, You Have a Key Deadline Coming Up

If you're turning 73 in 2026, the IRS is about to require a mandatory annual withdrawal from your tax-deferred retirement accounts for the first time. It's called a required minimum distribution (RMD), and missing the deadline may result in a significant and avoidable tax bill.

The good news is you have options and a clear opportunity to prepare yourself financially before that deadline arrives.

Editor's note: Tax rules and thresholds referenced are based on current IRS guidelines and may change.

Turning 73 this year? Mark your calendar

Age 73 is the IRS-mandated starting point for required minimum distributions under the SECURE Act 2.0. Once you hit it, the government requires you to begin withdrawing a calculated minimum from your tax-deferred retirement accounts each year.

You have two options for your first withdrawal. You could take it by Dec. 31, 2026, or delay it until April 1, 2027. That choice has a direct impact on your taxes.

What is an RMD?

A required minimum distribution is the minimum amount the IRS requires you to withdraw annually from traditional IRAs, SEP IRAs, SIMPLE IRAs, and most employer-sponsored plans like 401(k)s and 403(b)s. It's taxed as ordinary income.

The IRS enforces RMDs to ensure that deferred taxes are eventually paid. Even if you don't need the money, you're still required to take the distribution and report it as income.

What counts toward your RMD and what doesn't?

Not every withdrawal automatically satisfies your RMD. Distributions from Roth IRAs don't count, since those accounts aren't subject to RMDs in the first place. Rollovers don't count either. Moving money from one IRA to another doesn't satisfy the requirement.

Only actual taxable distributions taken directly from the qualifying account apply. If you have multiple 401(k)s, each requires a separate withdrawal. You cannot pool them the way you could with traditional IRAs.

The key deadline most people miss

For most retirees, the annual RMD deadline is Dec. 31. But for your very first RMD, the one tied to the year you turn 73, the IRS grants an extension. You have until April 1 of the following year. If you turn 73 in 2026, that means your official required beginning date is April 1, 2027. That flexibility may seem helpful, but it might create a costly timing issue.

Why you may not want to wait until 2027

If you delay your first RMD to April 1, 2027, you will still have to take your second RMD by Dec. 31, 2027. That means two taxable distributions in the same calendar year, both counted as ordinary income in 2027.

Two RMDs stacked in the same year could push you into a higher federal tax bracket, increase the taxable portion of your Social Security benefits, and trigger higher IRMAA Medicare surcharges.

How to calculate your RMD

To calculate your RMD, take your account balance as of Dec. 31, 2025, and divide it by the IRS life expectancy factor for your age from the Uniform Lifetime Table. At age 73, that factor is 26.5.

For example, if your account balance is $530,000, your RMD would be about $20,000. Most custodians calculate this for you, but you remain responsible for taking the correct amount.

What happens if you miss the deadline?

Missing your RMD triggers an IRS excise tax penalty of 25% of the amount you failed to withdraw. On a $20,000 RMD, that's $5,000 in penalties on top of the tax you'd owe on the withdrawal itself.

If you correct the mistake within two years, the penalty may be reduced to 10%. Still, it's a costly error that's easy to avoid with proper planning and timing.

How RMDs affect your overall tax picture

RMDs stack on top of your other income, including Social Security, pensions, and investments. Once combined income exceeds $34,000 (single) or $44,000 (married), up to 85% of your Social Security becomes taxable.

They could also trigger IRMAA surcharges, which begin at $109,000 MAGI for single filers and $218,000 for couples. Even $1 over a threshold may add up to $6,936 annually per person.

A smarter approach to your first RMD

For most retirees, taking the first RMD in 2026 makes more sense. It spreads income across two tax years instead of concentrating it in one.

This approach helps you maintain better control over your tax bracket and reduces the risk of triggering additional taxes or surcharges in a single year. It also gives you more flexibility to coordinate withdrawals with other income sources like Social Security or investment gains.

Using QCDs to reduce your tax burden

If you're charitably inclined, a Qualified Charitable Distribution (QCD) could help. In 2026, you can transfer up to $111,000 directly from your IRA to a qualified charity. Married couples in which both spouses have IRAs could each use the QCD limit, for a combined potential exclusion of $222,000. This counts toward your RMD but does not increase your taxable income. It's a powerful way to reduce your tax liability.

Should you reinvest your RMD?

If you don't need the money for living expenses, you may reinvest your RMD, just not back into a tax-deferred account. Once withdrawn, it may be put in a taxable brokerage account, where it can continue to grow. You could also use it to fund a Roth IRA if you have earned income and meet the contribution limits. Either way, reinvesting keeps the money working rather than sitting idle in cash.

Bottom line

For many retirees, taking the first RMD by Dec. 31, 2026, is the right call. It keeps two taxable distributions from colliding in 2027 and reduces the risk of inadvertently triggering higher Medicare premiums or Social Security taxation.

Making the right timing choice helps you keep more of your income, manage tax exposure more effectively, and create more room to grow your wealth over time.

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