RMDs: When to Take Them and What to Do If You Miss the Deadline
Hey there, retirees! If you’re nearing—or already hit—the magic age of 73, chances are you’ve heard about Required Minimum Distributions (RMDs). These mandatory withdrawals from your retirement accounts can feel like another hoop to jump through, but don’t worry—I’m here to make it simple. And if you’re worried you missed your first one, don’t panic—you’ve got options. Let’s break it down!
When Do You Need to Take Your First RMD?
So, here’s the deal: when you turn 73, the IRS says it’s time to start withdrawing from those tax-deferred accounts—like IRAs and 401(k)s. You can take your first RMD anytime in the year you turn 73. For example, if you celebrate your 73rd birthday in 2025, you can take your RMD at any point during 2025.
But here’s the kicker: the IRS gives you a little breathing room for that first RMD. You have until April 1 of the following year to take it. This means if you turn 73 in 2025, you can wait until April 1, 2026, to complete your first withdrawal.
What Happens If You Wait Until April 1?
Here’s where some planning comes in. If you wait until April 1 to take your first RMD, you’ll also need to take your second RMD by December 31 of that same year. Yep, two RMDs in one year. While this is perfectly legal, it could bump you into a higher tax bracket depending on the amount and your other income. Taking your first RMD earlier in the year can help smooth out your taxes—something worth considering.
What If You Miss the Deadline?
Uh-oh—did you forget to take that first RMD by April 1? Don’t panic! You’re not doomed to face penalties just yet. The IRS understands that mistakes happen, and they offer a way to fix it. If you missed your first RMD deadline, you can request a waiver of the penalty by:
- Taking the missed RMD as soon as possible.
- Filing IRS Form 5329 (don’t worry, it’s easier than it sounds) and including a letter explaining why you missed the deadline. Common reasons, like illness or a misunderstanding of the rules, are usually considered valid.
The penalty for missing an RMD is 50% of the amount you failed to withdraw, but if you take action quickly and explain your situation, the IRS may waive it entirely.
How to Stay on Track
Here are some tips to avoid future headaches:
- Set a Reminder: Mark those key dates on your calendar—April 1 for the first RMD and December 31 for all the rest.
- Work with Your Financial Institution: Many retirement account custodians can calculate your RMD and even automate the withdrawals for you.
- Plan for Tax Implications: Talk to your financial advisor to strategize the timing of your withdrawals and manage your tax burden effectively.
Final Thoughts
Taking your first RMD might seem like a chore, but with a little planning (and some backup if you miss the deadline), it’s a manageable part of your retirement journey. Whether you decide to withdraw early in the year or use that April 1 extension, what matters most is staying informed and proactive.
You’ve worked hard to build your savings—now it’s time to make the most of them. Let me know if you’d like a deeper dive into any of these details!
Why Middle-Class Taxpayers Can’t Catch a Break
Let’s be real—tax season isn’t exactly something most of us look forward to. For middle-class Americans, it’s more of a necessary chore than an exciting opportunity. You file your W-2, take the standard deduction, maybe claim a few credits, and hope your refund covers at least one unexpected expense. But if you’ve ever wondered why you can’t seem to lower your tax bill, the answer might lie in the tax code itself.
For starters, the standard deduction—while helpful—doesn’t leave much room for creativity. Most middle-class families take it because itemizing isn’t worth the effort. Why? Because the threshold to itemize is sky-high, and everyday expenses like mortgage interest, property taxes, or medical bills rarely add up enough to surpass it.
And if you think the mortgage interest deduction is your golden ticket, think again. With the standard deduction sitting at $30,000 for married couples in 2025, the interest on a typical middle-class mortgage isn’t enough to make itemizing worth it.
Deductions that are still available—like student loan interest or retirement account contributions—are capped at relatively small amounts. The student loan deduction maxes out at $2,500, and while contributions to accounts like 401(k)s do reduce taxable income, not everyone has the financial flexibility to max them out. For middle-class families juggling bills, these deductions might help a little but don’t lead to massive savings.
And what about credits? Well, the Earned Income Tax Credit (EITC) or the Child Tax Credit can provide a nice bump, but they come with strict income limits. Many middle-class families earn just enough to phase out of eligibility or receive reduced benefits. You’re stuck in a weird financial limbo—not wealthy enough to take advantage of complex tax strategies, but earning too much to qualify for big credits designed to help lower-income families.
Meanwhile, wealthy taxpayers? They’re playing a completely different game. From conservation easements to charitable LLCs, they have access to deductions and credits that require significant upfront investment. The tax code isn’t built to favor them intentionally—it just rewards those with extra cash to spare. The problem is, middle-class Americans don’t have that kind of money lying around to “spend money to save money.”
The result? A tax system where middle-class taxpayers are left with limited options to reduce their income taxes. It’s frustrating, especially when you consider how much the wealthy are able to save with strategies that feel completely out of reach. Until reforms address this disparity, middle America will keep carrying a heavier tax burden—while hoping for a fairer shake in the future.
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