I Turn 73 This Year. How Do I Avoid RMD Taxes?

The IRS allows workers to put aside pre-tax earnings in traditional Individual Retirement Accounts, 401(k)s and similar workplace accounts. Within these accounts, the money grows tax-deferred. But the IRS only waits so long to collect, and once you reach age 73, or age 75 if you were born in 1960 or later, the law forces retirees to take required minimum distributions and start paying tax.

Speak to a financial advisor about how to manage RMDs and income streams in retirement.

These distributions, known as RMDs, often aren’t a problem for anyone already taking withdrawals to cover their living expenses. But if you’ve gotten along without tapping retirement accounts, paying the associated taxes is something you may want to avoid or at least delay as long as you can.

How Your RMD Is Calculated

The amount of your RMD is based on your account balance at the end of the previous year and the tax agency’s life expectancy tables. The tables are designed to withdraw all your account assets by the estimated end of your life. If you turn 73 in 2026, your life expectancy factor would be 26.5. If you had an IRA with a balance of $500,000 on Dec. 31, 2025, you’d divide the balance by your life expectancy factor and find that your RMD was $18,868 for the year, which would be added to your ordinary income for the year and taxed accordingly.

There are a few tactics you can use to reduce or manage RMDs.

And if you want to estimate how much you’ll need to withdraw from your retirement accounts once you reach RMD age, you can use SmartAsset’s RMD Calculator.

Required Minimum Distribution (RMD) Calculator

Estimate your next RMD using your age, balance and expected returns.

Quickly estimate your RMDs and when to take them

RMD Amount for IRA(s)

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RMD Amount for 401(k) #1

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RMD Amount for 401(k) #2

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About This Calculator

This calculator estimates RMDs by dividing the user's prior year's Dec. 31 account balance by the IRS Distribution Period based on their age. Users can enter their birth year, prior-year balances and an expected annual return to estimate the timing and amount of future RMDs.

For IRAs (excluding Roth IRAs), users may combine balances and take the total RMD from one or more accounts. For 401(k)s and similar workplace plans*, RMDs must be calculated and taken separately from each account, so balances should be entered individually.

^*The IRS allows those with multiple 403(b) accounts to aggregate their balances and split their RMDs across these accounts.

Assumptions

This calculator assumes users have an RMD age of either 73 or 75. Users born between 1951 and 1959 are required to take their first RMD by April 1 of the year following their 73rd birthday. Users born in 1960 and later must take their first RMD by April 1 of the year following their 75th birthday.

This calculator uses the IRS Uniform Lifetime Table to estimate RMDs. This table generally applies to account owners age 73 or older whose spouse is either less than 10 years younger or not their sole primary beneficiary.

However, if a user's spouse is more than 10 years younger and is their sole primary beneficiary, the IRS Joint and Last Survivor Expectancy Table must be used instead. Likewise, if the user is the beneficiary of an inherited IRA or retirement account, RMDs must be calculated using the IRS Single Life Expectancy Table. In these cases, users will need to calculate their RMD manually or consult a finance professional.

For users already required to take an RMD for the current year, the calculator uses their account balance as of December 31 of the previous year to compute the RMD. For users who haven't yet reached RMD age, the calculator applies their expected annual rate of return to that same prior-year-end balance to project future balances, which are then used to estimate RMDs.

This RMD calculator uses the IRS Uniform Lifetime Table, but certain users may need to use a different IRS table depending on their beneficiary designation or marital status. It's the user's responsibility to confirm which table applies to their situation, and tables may be subject to change.

Actual results may vary based on individual circumstances, future account performance and changes in tax laws or IRS regulations. Estimates provided by this calculator do not guarantee future distribution amounts or account balances. Past performance is not indicative of future results.

SmartAsset.com does not provide legal, tax, accounting or financial advice (except for referring users to third-party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States). Articles, opinions and tools are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. Users should consult their accountant, tax advisor or legal professional to address their particular situation.

Draw Down Your Tax-Deferred Assets

In the years between retirement and when RMDs begin, you may have a window to reduce future taxable income. Withdrawing from tax-deferred accounts before Social Security and pension income begin can allow you to take those withdrawals at a lower tax rate, while also shrinking the account balances that RMDs are eventually calculated from. At the same time, delaying Social Security allows your benefit to grow by about 8% per year between full retirement age and age 70.

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Keep Accounts Structured Efficiently

RMD rules apply differently depending on the type of account. Traditional IRAs can be aggregated, meaning you can calculate the RMD for each account, total them, and then withdraw it from one or more IRA accounts. In contrast, employer-sponsored plans like 403(b)s require separate RMDs from each account.

If you have multiple workplace plans, consolidating them into a rollover IRA can simplify withdrawals and make it easier to manage RMDs from one account. Keep in mind that RMDs are calculated per individual, not per tax return. Each spouse must calculate and take their own RMDs from their own accounts separately, regardless of how you file your taxes.

A financial advisor can guide you through the best ways to structure your retirement income.

Be Charitable

If you don’t need RMD cash for living expenses, you can donate some or all of the money to a qualified charity. By making a qualified charitable distribution (QCD), the money goes directly from the IRA custodian to the charity and you don’t pay income tax on the amount donated.

Just be aware that you can’t take the cash out and donate it yourself: Once the money comes to you, it’s taxable. You also can’t claim the same amount as a charitable deduction if it was already excluded from income through a QCD. Finally, make sure the charity you choose is considered qualified by the IRS, or you’ll still end up paying taxes.

Consider Roth Conversions

Converting traditional IRA assets to a Roth IRA shifts future withdrawals into a tax-free category. While you’ll pay income tax on the converted amount in the year of conversion, this strategy can reduce or eliminate future RMDs from those converted assets.

Gradual conversions over multiple years can help manage tax brackets. This approach is often most effective in lower-income years before RMDs begin. Roth accounts also pass to heirs with different tax treatment, which can shape long-term estate planning.

For help with minimizing taxes on your retirement income, talk to a financial advisor today.

Watch Your Tax Bracket Each Year

RMDs can push retirees into higher tax brackets, especially when combined with Social Security, pensions or investment income. Managing taxable income year by year can help reduce this effect.

This may involve spreading withdrawals across different account types, accelerating income in lower-tax years or coordinating withdrawals with deductions. Even small adjustments can influence how much of your retirement income is taxed over time.

Time Income and Withholding Strategically

Taxes on RMDs are treated as if they were paid evenly throughout the year, even if the distribution occurs late in the year. This creates flexibility when coordinating withholding.

For example, you can estimate your total annual tax liability in December and then take a larger RMD with enough federal tax withheld to cover what you owe across all income sources for the year. Keep in mind that the RMD itself counts as taxable income, so the withholding amount needs to account for the tax on the additional withdrawal as well.

Don’t Miss RMD Deadlines

Failing to take an RMD can result in a penalty of up to 25% of the amount not withdrawn, although it may drop to 10% if corrected within two years. Keeping track of deadlines and account balances can help avoid unnecessary penalties. For more help with RMDs, consider matching with a financial advisor.

What to Do With Your RMD If You Don’t Need the Money

Being forced to take money out of an account you weren’t planning to touch is an adjustment, but the distribution doesn’t have to sit idle. Once you’ve paid the taxes on it, there are several practical directions it can go.

One of the most straightforward moves is reinvesting it in a taxable brokerage account. The money has left your IRA, but it doesn’t have to leave the market. Depending on how it’s invested, future gains may be taxed at the lower long-term capital gains rate rather than as ordinary income, which helps offset some of the tax drag from the forced withdrawal.

If you have grandchildren approaching college age, directing RMD funds toward a 529 plan is worth considering. The ownership structure matters, though. Grandparent-owned 529 accounts are not counted in FAFSA aid determinations, while parent-owned accounts are. This distinction can affect how much financial aid a student qualifies for.

Gifting is another option that works well for some retirees. In 2026, you can give up to $19,000 per person per year without triggering gift tax, and married couples can give double that amount per recipient. For those who were already planning to pass money to family, using RMD funds for that purpose makes the timing work in your favor.

The common thread across all of these options is that a little planning ahead of time tends to produce better results than deciding what to do with the money after it has already landed in your account.

Bottom Line

Managing RMDs and the many tax questions that arise in retirement can be complex. Take the time to estimate your retirement taxes before you start collecting pensions, Social Security and withdrawals from retirement accounts.

Tips for Retirement Planning

Balancing taxes and retirement income is a crucial issue when planning for retirement. A knowledgeable financial advisor can help you decide how to structure and coordinate these payments over the span of your retirement. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
The order in which you withdraw funds can affect how much you owe in taxes. For example, drawing from taxable accounts before tax-deferred accounts may help manage your tax bracket in certain years. A coordinated strategy can help smooth out taxable income over time.