The Age 73 IRA Withdrawal Rule That Can Cost You a 25% Penalty (RMDs Explained)

Under IRS rules, owners of traditional IRAs, SEP and SIMPLE IRAs and most workplace retirement plans must start taking required minimum distributions (RMDs) at age 73. Each year's RMD is the prior December 31 balance divided by a factor from the IRS Uniform Lifetime Table, and a missed RMD can trigger a 25% excise tax, cut to 10% if corrected within two years. This video walks through the calculation from IRS Publication 590-B, the first-year April 1 deadline, account aggregation rules, the still-working exception, Roth accounts and qualified charitable distributions. DISCLAIMER: This video is for general educational purposes only and is not financial, tax, legal or investment advice. Rules and figures change every year; confirm your own situation with the Social Security Administration, the IRS, Medicare, or a licensed professional before making decisions. CHAPTERS 00:00 Introduction 01:25 The Rule at 73 03:08 How the Number Is Calculated 06:09 The April 1 Trap 08:22 Missed It? The Penalty and the Fix 10:49 What the Rules Allow OFFICIAL SOURCES • IRS, Retirement plan and IRA required minimum distributions FAQs: https://www.irs.gov/retirement-plans/... • IRS Publication 590-B (2025), Distributions from IRAs: https://www.irs.gov/publications/p590b • IRS, Retirement topics, Required minimum distributions: https://www.irs.gov/retirement-plans/... Here is the whole rule in one sentence. From age seventy-three, you divide last year's December thirty-first balance by your factor in the IRS table and withdraw at least that much each year, with the first one allowed to wait until April first, and a twenty-five percent excise tax on anything you miss, cut to ten percent if you fix it within two years. The math is simple. The timing is where the choices are. PORCHLIGHT MONEY explains the official rules behind Social Security, Medicare, required distributions and retirement taxes, straight from SSA.gov, IRS.gov, Medicare.gov and the law itself. Real numbers, calm explanations, no hype. #socialsecurity #retirement #medicare #retirementplanning #requiredminimumdistribution #rmdrules #rmdage73