Retirees Face $42,000 IRA Withdrawal at 73 as $650,000 Grows to $1.11 Million
Updated
Updated · Yahoo Finance · Sep 19
Retirees Face $42,000 IRA Withdrawal at 73 as $650,000 Grows to $1.11 Million
1 articles · Updated · Yahoo Finance · Sep 19
Summary
$42,000 in first-year required minimum distributions hit a retired couple at age 73 after they left $650,000 in two traditional IRAs untouched for 11 years.
A roughly 5% annual return lifted the accounts to about $1.11 million; under SECURE 2.0, age-73 RMDs use the IRS 26.5 life-expectancy factor.
The bigger tax problem came from timing: skipping Roth conversions during lower-income years meant dollars that could have been converted at 12% were instead pushed into the 22% bracket.
That pressure can worsen after one spouse dies, because the survivor files as single and reaches the 22% bracket at $50,400, making the same RMD more costly.
The report argues retirees relying on pensions or Social Security should not automatically leave IRAs untouched, because tax-deferred growth can later force larger taxable withdrawals.