6 Questions to Ask Before You Take Your First Required Minimum Distribution

6 Questions to Ask Before You Take Your First Required Minimum Distribution

Your first required minimum distribution is the one most likely to go wrong, because it is the only one that comes with a choice of timing, and the choice is a trap for a lot of households.

The rules themselves are not complicated. What makes the first year hard is that several decisions land at once: which accounts are in scope, when to take the money, how the distribution interacts with Medicare and Social Security, and who is responsible for the arithmetic. Here are the six questions worth settling before the money moves.

1. Which of My Accounts Are Actually Subject to an RMD?

Not all retirement accounts are treated the same way, and this is where assumptions cost money.

Traditional IRAs, SEP and SIMPLE IRAs, and most employer plans including 401(k) and 403(b) accounts are generally subject to required minimum distributions. Roth IRAs are not subject to RMDs during the owner's lifetime. Under SECURE 2.0, designated Roth accounts inside employer plans are no longer subject to lifetime RMDs either.

There is also a still-working exception that applies to some employer plans: if you are still employed and are not a 5 percent owner, the plan may let you defer distributions from that employer's plan until retirement. It does not apply to IRAs, and it depends on the plan's own terms, so read the plan document rather than assuming.

2. Should I Take the First Distribution This Year or by April 1?

Under SECURE 2.0, the required beginning age is 73 for people who turned 72 after December 31, 2022, moving to 75 beginning in 2033. For the first year only, you may delay the initial distribution until April 1 of the following year.

That option is where the trap lives. Delaying means two distributions land in the same tax year, the delayed first one and the regular second one, and stacking them can push taxable income into a higher bracket, surcharge, or phaseout than either would have alone.

Sometimes deferral still makes sense, for instance if the current year included an unusually large one-time income event and next year looks much lighter. The point is that this should be a calculation, not a default. Run both years side by side before choosing, and note that the answer depends on assumptions about future income and future law, neither of which is certain.

3. Can I Aggregate These Accounts or Not?

Aggregation rules differ by account type and people get this wrong in both directions.

Traditional IRA required distributions may generally be calculated per account and then taken from any one or more of your IRAs in any combination, as long as the total is satisfied. Employer plans generally do not work that way: each 401(k) usually requires its own distribution from that plan. Inherited accounts follow separate rules and are not aggregated with your own.

Getting this wrong in the direction of taking too little is the expensive one. A shortfall is subject to an excise tax of 25 percent of the amount not distributed on time, reduced to 10 percent if corrected within the correction window described in the rules. The tax may be waived for reasonable cause on request, but that is a remediation process, not a plan.

4. Does a Qualified Charitable Distribution Belong in the Picture?

If you give to charity anyway and you are at least 70½, a qualified charitable distribution moves money directly from an IRA to a qualifying charity. The amount is excluded from your taxable income and can count toward satisfying your RMD for the year, up to an annual per-person limit that is indexed for inflation.

For households that no longer itemize, this often does more than writing a check and claiming nothing. Reducing adjusted gross income can also matter for items keyed to income, which is a different benefit from a deduction.

The limitations are real and specific. The transfer must go directly from the IRA custodian to a qualifying charity, donor-advised funds and most private foundations do not qualify, employer plans are not eligible, and the timing has to line up with the distribution you are trying to offset. Confirm eligibility for your specific accounts and charities before initiating anything.

5. What Does This Do to My Medicare Premiums and Social Security Taxation?

This is the question that surprises people who did the tax math correctly and stopped there.

Medicare Part B and Part D income-related monthly adjustment amounts are based on modified adjusted gross income from a prior year, generally two years back. A distribution taken this year can therefore raise premiums two years from now, after the money is long spent. Higher income can also increase the portion of Social Security benefits that is taxable.

None of that makes a distribution wrong, since it is required. It does mean the true cost of a large distribution year is not visible on that year's return alone. Plan across several years rather than one, and ask whether the sequence of which accounts you draw from can be improved.

6. Who Is Calculating the Number, and How Am I Paying the Tax?

Custodians often provide an estimated RMD figure, but the responsibility for taking the correct amount is yours, across every account you hold. If you have accounts at four institutions, no single one of them sees the whole picture.

Then decide how the tax gets paid. You can have federal and state tax withheld from the distribution, or pay through quarterly estimates. Withholding is administratively simpler and can help with the safe harbor rules. Estimates give you more control over cash timing. Either is defensible. Choosing neither is how people end up with an underpayment penalty in a year they thought was handled.

Where an Advisor Fits

The reason this looks like six unrelated questions is that it sits across tax, Medicare, charitable giving, and portfolio decisions at the same time, and most households do not have one person looking at all of it.

Anthony Syracuse is a Scottsdale, Arizona practice founded in 2022, and its Sam's List profile lists work with high-net-worth individuals. Multi-year distribution sequencing is the kind of work that benefits from someone who sees the whole balance sheet rather than one account.

Anthony Syracuse has 5 verified client reviews on Sam's List as of 2026-06-26. Reviews reflect the experiences of individual clients, do not represent an endorsement by Sam's List, and are not indicative of future results.

No advisor can remove the requirement or promise a particular tax result, and outcomes depend on your circumstances and on rules that change. What planning can do is make the sequence deliberate. You can compare advisors and their listed specialties, along with verified client reviews, in the Sam's List financial advisor directory.

Frequently Asked Questions

At what age do required minimum distributions start? Under SECURE 2.0, the required beginning age is 73 for individuals who turned 72 after December 31, 2022, and it moves to 75 beginning in 2033. For the first year only, the initial distribution may be delayed until April 1 of the following year, which stacks two distributions into that tax year.

What is the penalty for missing an RMD? The excise tax is 25 percent of the amount that should have been distributed, reduced to 10 percent if the shortfall is corrected within the correction window provided in the rules. The tax may be waived for reasonable cause upon request, but relief is discretionary and requires filing, so it is not a substitute for taking the distribution.

Can I satisfy my RMD with a charitable donation? If you are at least 70½, a qualified charitable distribution paid directly from an IRA to a qualifying charity can be excluded from income and can count toward your RMD, up to an indexed annual limit. Donor-advised funds and most private foundations do not qualify, and employer plans are not eligible.

Do I have to take an RMD from every account separately? Traditional IRA amounts are generally calculated per account but may be taken from any combination of your IRAs, while employer plans such as 401(k)s generally require a separate distribution from each plan. Inherited accounts follow their own rules. Confirm the treatment for each account you hold rather than netting them together.

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About the author: Kimberly Green is the cofounder of Sam's List, where business owners and high earners find vetted CPAs, financial advisors, and fractional CFOs. She's met one-on-one with 400+ financial professionals and writes from the real data behind thousands of client-advisor matches. Ask her anything about finding an accountant - she's heard it all, including the questions people are afraid to ask.