RMDs, explained: why age 73 changes your tax picture
A required minimum distribution — an RMD — is the smallest amount the IRS requires you to withdraw from tax-deferred retirement accounts each year, starting at age 73. The withdrawal is taxed as ordinary income whether you need the money that year or not. That single word — required — is why 73 changes your tax picture: income you used to control becomes income the calendar controls.
Why RMDs exist
A traditional IRA or 401(k) runs on a deal: no tax on the way in, no tax while it grows, full ordinary-income tax on the way out. RMDs are the government's way of making sure "the way out" actually arrives. At 73, the deferral stops being open-ended and the tax bill starts coming due on a schedule.
How the amount is figured
Each year, the account balance at the previous year-end is divided by an IRS life-expectancy factor for your age. The factor shrinks as you age, so the required percentage rises each year. Larger balance, larger forced withdrawal — the arithmetic is that direct.
What stacks at 73
The RMD itself is taxable. The quieter effect is what that added income touches once it lands on top of Social Security, pensions, and everything else on the return:
| What it can touch | Where it starts (2026 figures) |
|---|---|
| Federal brackets | Each layer of added income is taxed at that layer's rate — for joint filers, the 22% bracket runs from $100,801 to $211,400 |
| Social Security taxation | Combined income over $32,000 (joint) can make up to 50% of benefits taxable; over $44,000, up to 85%. Single filers: $25,000 / $34,000. Not inflation-adjusted since 1984 |
| Medicare premiums (IRMAA) | Surcharges based on income from two years earlier, on a cliff — one dollar over a threshold triggers that tier's full surcharge, on top of the standard $202.90/month Part B premium |
| The 2025–2028 senior bonus deduction | $6,000 per person 65+ ($12,000 joint, both qualifying) phases out at 6 cents per dollar above $75,000 single / $150,000 joint |
One forced withdrawal can nudge several of these at once. That is the real story of age 73 — not the bracket alone, but the stack.
What people do before 73
The years between retiring and 73 are the window where the picture is still yours to arrange. Some people draw spending money from tax-deferred accounts early, on purpose, to shrink future RMDs. And some convert part of a traditional IRA to a Roth IRA during those lower-income years, because Roth IRAs have no lifetime RMDs at all — that mechanism, plainly: Roth conversions in plain English.
None of these is the answer for everyone. All of them work better as decisions made at 66 than discoveries made at 74.
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