6. Mismanaging Required Minimum Distributions (RMDs)
Retirees often trip over the RMD rules, leading to hefty tax bills. As of 2025, the RMD age is 73. (This will eventually rise to 75 starting in 2033 for those born in 1960 or later).
The “Two-in-One-Year” Mistake: You are allowed to delay your very first RMD until April 1 of the year after you turn 73. However, your second RMD is due by December 31 of that same year.
Taking two distributions in a single tax year can push you into a significantly higher tax bracket and potentially trigger higher Medicare premiums (IRMAA). For many retirees, it is smarter to take the first RMD in the actual year they turn 73 to spread out the income.
