If you’re in your 60s or early 70s, you’ve probably heard the term Required Minimum Distribution, or RMD. Most people know the acronym, but very few feel confident about what it actually means for their retirement income. In fact, many of the people who come into our office know they have an RMD “out there,” but they aren’t sure when it starts, how it’s calculated, or what the tax consequences might be.

In this post, we’re breaking down RMDs in simple, practical terms so you can prepare long before the deadline arrives.

What Exactly Is an RMD?

RMDs are the government’s way of eventually collecting taxes on the money you set aside in your 401(k), 403(b), or traditional IRA. Beginning at age 73 (or 75 if you were born in 1960 or later), you’re required to withdraw a certain percentage from your retirement accounts each year.

That percentage rises as you age, which means the amount you must withdraw—and pay taxes on—also increases. Many retirees are surprised by how large these withdrawals can become, especially if their accounts continue to grow.

Why RMD Planning Matters in Your 60s

A lot of people in their mid-60s aren’t taking anything from their IRA because they don’t need the income. That might seem smart—until you look ahead. If your account grows for the next 7–10 years and you haven’t withdrawn anything, your first RMD could be significantly higher than you expect.

A large RMD doesn’t just increase your federal taxes—it can push you into higher Medicare IRMAA brackets and lead to thousands of dollars in extra costs each year.

The goal isn’t just to calculate the RMD but to plan for it in a way that minimizes taxes over your lifetime.

Aggregating RMDs: What You Can (and Can’t) Combine

If you have multiple IRAs, you can add up the required distributions and take the entire amount from just one account. This flexibility allows you to leave certain accounts invested or take distributions from whichever IRA makes the most sense for your situation.

However, this rule does not apply to 401(k)s or other employer plans like 403(b)s or 457s. Those accounts each require their own separate RMD. Many people choose to roll old employer accounts into an IRA to simplify this process.

How Roth Accounts Change the Picture

One of the most powerful planning tools is the Roth IRA or Roth 401(k). Roth accounts do not have RMDs in retirement, and withdrawals are tax-free. Converting some of your traditional IRA into a Roth during your 60s can shrink your future RMDs and lower long-term taxes for both you and your spouse.

However, your yearly RMD cannot be converted to a Roth—you must take the RMD first and then convert additional amounts if it fits your tax plan.

The Risk of “Doing Nothing”

We meet many retirees who assume that avoiding withdrawals now will save them money later. Unfortunately, that approach often backfires. If your account continues to grow and you wait until age 73 or 75 to start taking withdrawals, you may face:

• RMDs larger than your actual spending needs
• Higher federal tax brackets
• Higher Medicare IRMAA charges
• Higher taxes for your surviving spouse
• Children inheriting a large IRA they must empty within 10 years, creating even more taxes

The real question is: Do you want to follow the government’s plan—or create your own?

Creating a Smart Distribution Plan

A good RMD strategy considers far more than the number printed on your statement. It should take into account:

• Your expected spending
• Tax brackets now vs. later
• Your spouse’s tax situation if they outlive you
• Future IRMAA exposure
• Whether Roth conversions make sense
• Your desire to leave money to your children or to use it during your lifetime

We use specialized planning software to show clients exactly how their RMDs—and their taxes—will look over time under different scenarios. Seeing the numbers makes the decision much clearer.

Final Thoughts

Your retirement savings should benefit you, not just the IRS. Planning ahead—especially in your 60s—gives you the chance to reduce future RMDs, control your tax bill, and create a strategy that matches your goals.

If you haven’t thought about RMDs yet, now is a great time to start. With the right plan in place, you can protect your income, lower your long-term taxes, and enjoy your retirement with confidence.