Social Security Urgent Warning: As 2025 moves forward, retirees who turn 73 this year need to mark a critical date on their calendars: **April 1, 2025**. That’s the deadline for taking your first **Required Minimum Distribution (RMD)** from certain retirement accounts. Missing this mandatory withdrawal could lead to **hefty IRS penalties**, potentially shrinking your savings at a time when every dollar counts.
What Is an RMD and Who Must Take It?
An RMD is a minimum amount of money the IRS requires you to withdraw annually from tax-deferred retirement accounts, starting at age 73. This rule applies to:
- Traditional IRAs
- 401(k)s and other employer-sponsored retirement plans
- Roth IRAs are exempt during the account holder’s lifetime.
- So, if you turn 73 in 2025 and have any of these accounts, you must take your first RMD by April 1, 2025, to stay compliant with IRS rules.
How Is Your RMD Calculated?
The IRS uses a simple formula:
Account Balance (as of Dec 31, 2025) ÷ Life Expectancy Factor
The life expectancy factor is found in official IRS tables. Most financial institutions will help calculate your RMD, but you are ultimately responsible for taking the correct amount.
Penalties for Missing Your RMD
Failing to withdraw the full RMD amount can result in a 25% penalty on the portion you missed. However, if you correct the mistake within two years and file IRS Form 5329, the penalty may be reduced to 10%.
Should You Take Your First RMD Before December 31?
- There’s a strategy angle here. You have the option to:
- Delay your first RMD until April 1, 2026, OR
- Take it before December 31, 2025
Why take it early? Because if you delay, you’ll need to take two RMDs in one tax year—one by April 1 and the next by December 31. This could raise your taxable income and potentially affect your Medicare premiums or Social Security taxation.
However, if your income is already high in 2025 (due to capital gains, property sales, etc.), delaying the RMD to early 2026 might lower your 2025 tax bill.
Tips to Stay Compliant and Avoid Penalties
Here’s what you should do if you’re turning 73 this year:
- Confirm your RMD amount with your financial advisor or institution
- Schedule the withdrawal well before April 1, 2026
- Plan your timing wisely to avoid higher tax consequences
- Act quickly and file Form 5329 if you miss your RMD
Turning 73 in 2025 means your retirement planning enters a new phase. Taking your first RMD by April 1, 2026, is not optional—it’s a legal requirement from the IRS. Missing it could cost you big in penalties. By planning ahead, confirming your amounts, and choosing the right withdrawal strategy, you can stay in good standing with the IRS and protect your hard-earned retirement savings. Talk to your financial advisor or tax professional now to make sure you’re on the right track.
FAQ’s
Who must take an RMD in 2025?
Anyone turning 73 in 2025 with a traditional IRA or 401(k) must take their first RMD by April 1, 2026. Roth IRAs are exempt during the account holder’s lifetime.
How is the RMD amount calculated?
The IRS calculates RMD by dividing your December 31 account balance by a life expectancy factor found in IRS tables. Your financial institution can help, but you’re responsible for it.
What happens if I miss my RMD?
You may face a 25% penalty on the missed amount. If corrected within two years and IRS Form 5329 is filed, the penalty could be reduced to 10%.
Should I take my first RMD in 2025 or wait until April 2026?
It depends. Taking your RMD in 2025 avoids taking two in one year. But delaying may help lower your 2025 taxable income. A tax advisor can guide you.
Do Roth IRAs require RMDs?
No. Roth IRAs are exempt from RMDs during the original account holder’s lifetime, making them a flexible retirement savings tool.
