Most people ask, “When should I take money from an IRA?” because they want to avoid mistakes, avoid surprises at tax time, and keep their plan on track.
Here is the straightforward answer.
If you have a traditional IRA, the government sets a deadline for when you must begin taking withdrawals, whether you need the money or not. Those required withdrawals are called Required Minimum Distributions, or RMDs.
Below is what matters and how we should think about it.
The key age to know: 73
If you are turning 73, the RMD rules matter because this is the age when RMDs generally begin.
At age 73, the question becomes less about “when should I take money?” and more about “when must I take money?”
Important point: you may be required to take an RMD even if you do not want the money, do not need the money, and would prefer to leave the IRA untouched.
Do you need to take an RMD at 73?
In many cases, yes.
But there are common situations where you may not have to take an RMD from a specific account.
Here is a clear way to think about it:
- Traditional IRAs: RMDs generally apply starting at age 73.
- Roth IRAs: RMDs do not apply during the owner’s lifetime.
- Workplace plans like a 401(k): If you are still working at the company and you do not own a large share of it, you may be able to delay RMDs from that plan. This depends on the plan rules.
If you are not sure what type of account you have, we can clarify that quickly. Getting this wrong can lead to unnecessary penalties and stress.
The first RMD has a deadline, but waiting has consequences
Your first RMD typically has a later deadline than future years. That sounds helpful, but it creates a decision.
If you delay your first RMD into the next year, you may end up taking two RMDs in the same calendar year.
That can matter, because taking more taxable income in one year can:
- Increase the taxes you owe
- Increase how much of your Social Security may be taxed
- Increase your Medicare costs in future years
The move is not automatically “take it early” or “delay it.” The move is to decide on purpose.
Is an RMD taxable?
Yes, in most cases.
Here is the clean rule:
- If the RMD is paid to you, it is generally taxable.
That means it can increase your taxable income for the year.
Now the important exception.
If it goes to a charity, it is not taxable
If you are charitably minded, there is a powerful planning option: sending IRA dollars directly to a qualified charity.
When done correctly, that transfer can satisfy some or all of your RMD and it is typically not counted as taxable income to you.
This is often a smart way to give because it can help you support causes you care about while also reducing the tax impact of your RMD.
Two critical notes:
- The transfer needs to be done the right way. If the money is paid to you first and then you write a check, that is usually treated differently.
- This only works for eligible charities. Not every organization qualifies.
If giving is part of your plan, we can coordinate the steps so it is clean, on time, and properly reported.
“Are kids considered charity?”
This comes up more than people admit, so let’s say it clearly.
“are kids considered charity? Although it feels like it, no gifting money to kids is not charity.”
Helping children or grandchildren is wonderful. It just does not fall under the charitable rules that can make an IRA-to-charity transfer non-taxable.
So if your goal is to help family, we can still be strategic. We just need to use the right approach, and we should not count on it reducing the taxes from an RMD.
A simple decision framework: what we will focus on
We cannot control the rules, but we can control the plan.
Here is the framework I use when guiding clients through IRA withdrawals and RMDs:
Confirm what accounts you have and whether an RMD applies IRA, Roth IRA, old employer plan, current employer plan. The rules are not identical.
Decide whether to take the first RMD this year or delay it We want to avoid stacking income if it creates a tax problem.
Plan how the RMD will be used
- If you need cash flow, we connect the withdrawal to your spending plan.
- If you do not need the money, we plan where it goes next, such as a taxable investment account or other goals.
- If you are charitable, we consider a direct charitable transfer to reduce taxable income.
Set a clear schedule so nothing is missed RMDs are deadlines, not suggestions. A calendar beats last-minute scrambling.
The bottom line
If you are approaching age 73, you want a clear answer to “when to take money from an IRA.”
Here is that answer in plain terms: RMDs may force the timing once you hit age 73, even if you do not need the money. If you take the money yourself, it is generally taxable. If you direct it to qualified charity the right way, it is generally not taxable.
If you would like, we can walk through your specific accounts, confirm whether an RMD applies, and map out a simple, step-by-step plan for this year and the years ahead.
This article is for general education and not tax or legal advice. Rules can change, and your situation matters.