How to Calculate Your Required Minimum Distribution (RMD) at Age 73

As you approach or enter your retirement years, understanding Required Minimum Distributions (RMDs) becomes a crucial part of your financial planning. The IRS mandates that individuals begin withdrawing a certain amount from their tax-deferred retirement accounts once they reach a specific age. Thanks to recent legislative changes like the SECURE Act 2.0, the age at which RMDs begin has shifted, and for many, that age is now 73.

This guide will walk you through everything you need to know about calculating your RMD at age 73, ensuring you stay compliant with IRS rules and avoid costly penalties.

What Are Required Minimum Distributions (RMDs)?

RMDs are the minimum amounts that a retirement plan account owner must withdraw annually starting with the year they reach a certain age. These rules apply to traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, 457(b)s, and other defined contribution plans. Roth IRAs are generally exempt from RMDs for the original owner, but beneficiaries of Roth IRAs are subject to RMD rules.

The primary purpose of RMDs is to ensure that the government eventually collects tax revenue on the money that has been growing tax-deferred in your retirement accounts.

The Shifting RMD Age

Historically, RMDs began at age 70½. The original SECURE Act in 2019 pushed this age to 72. Most recently, the SECURE Act 2.0, passed in late 2022, further increased the RMD age:

• If you were born between 1951 and 1959, your RMD age is 73.
• If you were born in 1960 or later, your RMD age will be 75.

This article focuses specifically on those for whom the RMD age is 73.

How to Calculate Your RMD at Age 73

The calculation for your RMD is straightforward, involving two key pieces of information:

1. Your account balance from the previous year.
2. A distribution period factor from the IRS Uniform Lifetime Table.

Step 1: Determine Your Account Balance

Your RMD for the current year is based on the fair market value (FMV) of your retirement accounts as of December 31st of the previous year. For example, if you're calculating your 2026 RMD at age 73, you'll need your account balance from December 31st, 2025.

• For IRAs: Your IRA custodian will typically provide this information on your year-end statement. If you have multiple IRA accounts, you must sum the balances of all traditional, SEP, and SIMPLE IRAs to get your total balance. While you can take the total RMD from any one or more of your IRA accounts, the calculation uses the aggregate balance.
• For Employer-Sponsored Plans (401(k), 403(b), etc.): Each employer plan calculates its RMD separately. You will need the December 31st balance for each plan.

Step 2: Find Your Distribution Period from the Uniform Lifetime Table

The IRS provides tables to determine the distribution period based on your age. For most individuals, the "Uniform Lifetime Table" is used. This table assumes you have a beneficiary who is 10 years younger than you, regardless of your actual beneficiary's age, to provide a longer distribution period and thus a smaller annual RMD.

For someone who is age 73, the distribution period from the Uniform Lifetime Table is 26.5.

You can verify this and find other ages in IRS Publication 590-B.

Step 3: Perform the Calculation

Once you have your prior year-end balance and the distribution period, simply divide the balance by the factor:

RMD = (Account Balance as of December 31st of Previous Year) / (Distribution Period from Uniform Lifetime Table)

Example Calculation:

Let's say you are 73 years old in the current year, and your total traditional IRA balance as of December 31st of the previous year was $500,000.

• Account Balance (Dec 31st, prior year) = $500,000
• Your Age = 73
• Distribution Period (from Uniform Lifetime Table for age 73) = 26.5

RMD = $500,000 / 26.5 = $18,867.92

This means you would need to withdraw at least $18,867.92 from your traditional IRAs by the RMD deadline for the current year.

Important Considerations for Your First RMD Year

Your "first RMD year" is the year you turn 73. For this initial RMD, you have a special deadline:

• You can take your first RMD by December 31st of the year you turn 73.
• Alternatively, you can defer your first RMD until April 1st of the year following the year you turn 73.

If you choose to defer, remember that you will have to take two RMDs in the second year: your first RMD (deferred from the prior year) by April 1st, and your second RMD (for the current year) by December 31st. This could push you into a higher tax bracket, so plan carefully!

Common RMD Questions and Best Practices

What if I have multiple IRAs?

If you have multiple traditional IRAs, you calculate the RMD based on the total balance of all your IRAs. However, you can withdraw the total RMD amount from any one or a combination of your IRA accounts.

What if I have multiple 401(k)s?

For employer-sponsored plans (like 401(k)s, 403(b)s), you must calculate and take the RMD separately from each plan. You cannot aggregate them like IRAs.

What if I'm still working?

If you are still working for the employer that sponsors your 401(k) (and you don't own more than 5% of the company), you might be able to delay RMDs from that specific 401(k) until you retire. However, RMDs from your IRAs and other previous employer plans still apply.

What are Qualified Charitable Distributions (QCDs)?

If you are 70½ or older, you can make a Qualified Charitable Distribution (QCD) directly from your IRA to an eligible charity. QCDs count towards your RMD and are excluded from your taxable income, offering a great tax-efficient way to satisfy your RMD while supporting causes you care about.

What are the penalties for not taking an RMD?

Failing to take your RMD or taking less than the required amount can result in a significant penalty. The penalty is generally 25% of the amount not distributed. If you correct the shortfall within a specified period, the penalty may be reduced to 10%.

Conclusion

Calculating your RMD at age 73 is a vital step in managing your retirement finances. By understanding the rules, using the correct distribution period, and planning for your withdrawals, you can avoid penalties and ensure your retirement savings continue to serve your financial goals. Always consider consulting with a qualified financial advisor or tax professional to ensure your RMD strategy aligns with your overall financial plan.