When Is the Right Time to Take My First RMD?

Core Points - The IRS mandates annual withdrawals from traditional IRAs, 401(k)s, and other tax-deferred retirement accounts, with the current required minimum distribution (RMD) age set at 73, increasing to 75 in 2033 under the SECURE 2.0 Act [2][3] Group 1: RMD Mechanics - RMDs are calculated based on the account balance at the end of the previous year divided by the IRS life expectancy factor [4] - For instance, a 74-year-old with a $200,000 IRA balance would have an RMD of $7,843, calculated using a life expectancy of 25.5 years [5] Group 2: RMD Timing - Individuals born before July 1, 1949, must take their first RMD at age 70 ½, while those born between July 1, 1949, and 1950 must start at age 72 [5] - Those born between 1951 and 1959 must take their first RMD by April 1 of the year after turning 73, and individuals born in 1960 or later must do so by April 1 of the year after turning 75 [5] Group 3: Postponing RMDs - The IRS allows postponement of the first RMD until April 1 of the following year, which can be beneficial for tax planning [6] - For example, a person born in 1952 can start RMDs this year but can wait until April 1, 2026, to withdraw [6] - Postponing the first RMD may be advantageous if a spouse is still working, potentially resulting in a lower tax bracket by the time the withdrawal is made [9]