THE HORIZON
Twenty years out, a 73-year-old builder opens his IRA app one April morning. It shows a required withdrawal near $58,000, due on a date fixed decades ago.
That date is April 1 of the year after he turns 73. The rule has not moved since Congress last touched it inside SECURE 2.0.
The number on the screen is not fixed. It moves each year with the account balance and a government life-expectancy table, and both are still years from being set.
This April 1, 2025, the same deadline arrived for anyone who turned 73 during 2024. The Internal Revenue Service issued a public reminder ahead of it, and that reminder is this week's real story.
THE EVENT
On April 1, 2025, the deadline passed for retirees who turned 73 in 2024 to take their first required minimum distribution from IRAs, 401(k)s, and similar accounts. The IRS issued a formal reminder in the weeks before the date.
The rule traces to the SECURE 2.0 Act of 2022, which raised the RMD starting age from 72 to 73 beginning in 2023. It rises again to 75 in 2033.
Anyone who delayed a first RMD into 2025 under the special first-year rule must also take a second distribution by December 31, 2025. Two withdrawals land in the same tax year for that group.
RMD rules apply to traditional, SEP, and SIMPLE IRAs, and to workplace plans including 401(k), 403(b), and 457(b) accounts. Roth IRAs stay exempt while the original owner is alive.
Missing the deadline carries a real cost. The excise tax on a shortfall is 25 percent of the amount not withdrawn, reduced to 10 percent if corrected within two years.
THE PATH
The mechanical consequence is tax timing, not investment selection. A builder who delays his first RMD to April 1 stacks two taxable distributions into one calendar year, and that can push total income into a higher bracket.
On a $1.2 million traditional IRA, an 8 percent distribution rate means roughly $96,000 pulled out in a single year instead of spread across two. That extra reported income can trigger higher Medicare Part B and D premiums two years later, through IRMAA surcharges tied to income.
The non-obvious move sits earlier, in the years between 59 and 73. Roth conversions completed before the first RMD year shrink the traditional balance the formula applies to, lowering every required withdrawal that follows.
A builder converting roughly $50,000 a year for a decade removes about $500,000 from the base the RMD formula uses. That produces a smaller mandatory withdrawal at 73, and smaller IRMAA exposure in every year after.
Outside the retirement account, the same April 1 mechanics reshape brokerage strategy. Money pulled from an IRA beyond spending needs can be redirected into a taxable brokerage account holding similar positions.
That shift trades tax-deferred growth for capital-gains treatment on future appreciation, often taxed below ordinary income rates. It also resets the cost basis to the withdrawal date's price.
Real assets enter through a narrower door. A qualified charitable distribution, up to $108,000 for 2025, can satisfy an RMD directly from an IRA to a donor-advised fund or charity, and that amount never counts as taxable income.
For a builder who already gives to a church, a school, or a foundation, routing the RMD through a QCD keeps the withdrawal off his tax return entirely. That preserves eligibility for income-based benefits the extra income would otherwise threaten.
A builder holding rental property inside a self-directed IRA faces the same clock on a less liquid asset. An RMD from that account can force a partial sale, a refinance, or a cash contribution from outside the account just to meet the distribution.
Business capital owners face a separate wrinkle. RMDs from a SEP-IRA funded by a small business draw down capital that might otherwise fund equipment or inventory, so the withdrawal timing deserves the same planning as a payroll decision.
THE WATCH
Watch the RMD age schedule itself, which climbs to 75 starting in 2033 for anyone born in 1960 or later. That extra gap between 73 and 75 is more time for Roth conversions to do their work.
Watch IRS guidance each fall for updated life-expectancy tables, which set the divisor behind every RMD calculation. A revised table changes the withdrawal math without any new law passing through Congress.
A builder now knows his RMD is not a market event. It is a calendar event, and the years before it arrives are the only ones he still controls.
Sources
IRS reminds retirees: April 1 final day to begin required withdrawals from IRAs and 401(k)s: https://www.irs.gov/newsroom/irs-reminds-retirees-april-1-final-day-to-begin-required-withdrawals-from-iras-and-401ks
IRS Retirement topics - Required Minimum Distributions: https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs