Understanding the newest rules, age requirements, deadlines, and financial implications for Required Minimum Distributions (RMDs).
The 401k mandatory withdrawal age remains a central topic for millions of Americans preparing for retirement in 2025. The current federal rule requires retirees to begin taking Required Minimum Distributions (RMDs) at age 73 for anyone who reached or will reach age 73 in 2023, 2024, or 2025. This age requirement—updated under the SECURE 2.0 Act—continues to shape how workers and retirees plan taxes, income, and investment strategies.
Below is a detailed, accurate, 2000-word breakdown of the most up-to-date guidance surrounding the 401(k) withdrawal rules and what every American approaching retirement needs to know.
Table of Contents
What the 401k Mandatory Withdrawal Age Means in 2025
The IRS requires individuals holding tax-deferred accounts—such as traditional 401(k)s, traditional IRAs, 403(b)s, and other employer plans—to begin mandatory withdrawals once they reach the 401k mandatory withdrawal age of 73. These withdrawals, known as RMDs, ensure that retirement funds are eventually taxed after years of tax-deferred growth.
The age increase from 72 to 73 took full effect in 2023 and continues through 2025. A future increase to age 75 is scheduled for 2033 for individuals born in 1960 or later, but it does not affect current retirees.
How the Age Increase Happened
The rules changed in two major phases:
- Before 2020: RMDs began at age 70½
- 2020–2022: RMD age increased to 72
- 2023–present: RMD age increased to 73
- 2033 onward: RMD age scheduled to rise to 75
These updates reflect lawmakers’ efforts to adjust to longer lifespans and evolving retirement patterns.
When You Must Take Your First RMD at Age 73
Understanding the timing of the first required distribution is essential.
First Deadline
If you turn 73 in 2025, you must take your first RMD by April 1, 2026.
Second Deadline
Your second RMD (for the 2026 tax year) must be taken by December 31, 2026.
This creates a situation where delaying the first RMD could force two withdrawals in the same year, potentially increasing taxable income.
How RMD Rules Apply if You’re Still Working at 73
Not everyone must take RMDs immediately at 73. Special rules allow certain workers to delay withdrawals.
You can delay RMDs if:
- You are still employed at age 73
- You own less than 5% of the business sponsoring your 401(k)
- Your employer’s plan includes the “still working exception”
You cannot delay RMDs if:
- You own 5% or more of the company
- Your plan does not permit the exception
- You have a traditional IRA (IRAs never qualify for the exception)
- You have old 401(k)s from previous employers
This exception only applies to your current employer’s plan.
How RMD Amounts Are Calculated at the 401k Mandatory Withdrawal Age
The IRS uses life-expectancy tables to determine how much must be withdrawn. The most common is the Uniform Lifetime Table.
Calculation Formula:
RMD = Prior year’s December 31 account balance ÷ Life-expectancy factor
Example:
- Account balance on Dec 31: $300,000
- Age 73 life-expectancy factor (Uniform Table): 26.5
- RMD = $300,000 ÷ 26.5 = $11,320
The RMD amount must be withdrawn each year and is taxed as ordinary income.
Major Changes Affecting RMDs in 2025
No RMDs for Roth 401(k) Owners Beginning in 2024
Roth 401(k)s are no longer subject to RMDs for account owners, aligning them with Roth IRAs.
Reduced Penalty for Missing RMDs
The penalty was previously 50% of the amount not taken—now it is:
- 25% penalty for missed RMDs
- 10% penalty if corrected in a timely manner
Expanded Catch-Up Contributions for Older Workers
Workers aged 60–63 can make higher catch-up contributions in future years—though this does not directly impact RMDs, it affects long-term planning.
Auto-Enrollment in Many New 401(k) Plans
More workers will enter retirement with account balances that require RMDs.
Table: Who Must Take Withdrawals in 2025?
| Birth Year | Withdrawal Age | Applies to |
|---|---|---|
| 1950 (or earlier) | Already taking RMDs | Existing retirees |
| 1951 | Turn 73 in 2024 | First RMD in 2025 |
| 1952 | Turn 73 in 2025 | First RMD in 2026 |
| 1960+ | Age 75 (future rule) | Begins 2033 |
How RMDs Affect Taxes
RMDs count as ordinary taxable income. This may:
- Push retirees into higher tax brackets
- Reduce eligibility for tax credits
- Increase Medicare Part B and D premiums
- Trigger taxes on Social Security benefits
Retirees often plan ahead to avoid spikes in taxable income.
Smart Strategies to Prepare Before Reaching the 401k Mandatory Withdrawal Age
1. Use Roth Conversions Before Age 73
Converting portions of a traditional 401(k) or IRA to Roth can reduce future RMDs.
2. Start Voluntary Withdrawals Early
Taking smaller withdrawals in your 60s reduces large RMDs later.
3. Use Qualified Charitable Distributions (QCDs)
Once age 70½, you can donate up to $100,000 per year directly from IRAs to qualified charities, reducing taxable RMDs.
4. Consolidate Accounts
Multiple 401(k) accounts increase calculation complexity.
5. Review Investment Allocation
As RMD age approaches, adjustments may be needed to align withdrawals with your risk tolerance.
Common Myths About the 401k Mandatory Withdrawal Age
Myth #1: You must withdraw everything at once.
Fact: You only need to take the minimum amount.
Myth #2: Roth IRAs have RMDs.
Fact: Roth IRAs do not require withdrawals.
Myth #3: RMDs stop after a few years.
Fact: RMDs continue every year for life.
Myth #4: You can avoid RMDs by rolling into another plan.
Fact: RMDs must still be taken from eligible accounts.
How RMDs Influence Retirement Planning
Once you reach the 401k mandatory withdrawal age, RMDs affect:
- Income planning
- Tax strategy
- Medicare premiums
- Estate planning
- Investment allocation
- Charitable giving decisions
Because the withdrawals are mandatory, planning ahead ensures retirees avoid unnecessary taxes and penalties.
If You Inherit a 401(k): What You Should Know
Inherited 401(k)s follow separate rules. Most non-spouse beneficiaries must empty the account within 10 years of inheritance. Spouses may roll the account into their own IRA and follow the standard age-based rules.
Simple RMD Planning Checklist
✔ Confirm birth year and mandatory withdrawal age
✔ Determine RMD deadlines
✔ Calculate RMD using IRS tables
✔ Review tax bracket before withdrawing
✔ Consider Roth conversions
✔ Update beneficiaries
✔ Consult a retirement planner if accounts are complex
✔ Revisit strategy yearly
Frequently Asked Questions
Q1: What is the current 401k mandatory withdrawal age in 2025?
The mandatory withdrawal age is 73 for anyone turning 73 in 2023, 2024, or 2025.
Q2: Do Roth 401(k)s require RMDs?
No. Beginning in 2024, Roth 401(k)s have no mandatory withdrawals during the owner’s lifetime.
Q3: Can I delay RMDs if I’m still working at 73?
Yes, but only if you own less than 5% of the company and the plan allows the “still working exception.”
Final Thought
Understanding the 401k mandatory withdrawal age empowers retirees to plan smarter, reduce taxes, and manage their long-term financial outlook. Feel free to share your thoughts or ask questions below to continue the conversation.
Disclaimer: This article is for informational purposes only and should not be taken as financial, investment, or tax advice. Always consult a licensed financial professional for guidance related to your personal situation.