Can Retirees Delay RMDs? Key Rules to Know

A retiree who turns 73 may not need every dollar from a traditional IRA or workplace plan right away. That naturally raises a practical question: can retirees delay RMDs and leave more money invested? Sometimes, but the answer depends on the type of account, whether you are still working, and the calendar. A delay that sounds helpful can also create an unexpectedly large taxable-income year.

Required minimum distributions, or RMDs, are annual withdrawals the IRS generally requires from certain tax-deferred retirement accounts. Because contributions and earnings may have received tax-deferred treatment, distributions are typically taxable as ordinary income. The goal is not simply to meet a deadline. It is to coordinate withdrawals with household income, taxes, charitable giving, health care costs, and the income your family needs to live confidently.

Can Retirees Delay RMDs? The Basic Rule

For most people, the first RMD is tied to their required beginning date. If you were born from 1951 through 1959, your RMDs generally begin at age 73. For those born in 1960 or later, the applicable starting age is generally 75. Your first distribution can usually be postponed until April 1 of the year after the year you reach your required beginning age.

That April 1 date is an extension for the first RMD only. After that, annual RMDs are generally due by December 31. This means postponing the first withdrawal can require two RMDs in one calendar year: the delayed first distribution by April 1 and the next year's distribution by December 31.

For example, someone whose first RMD year is 2026 could wait until April 1, 2027, to take that first amount. But they would still need to take their 2027 RMD by December 31, 2027. Both distributions would generally be included in 2027 taxable income.

Why Delaying the First RMD Is Not Always a Tax Advantage

Keeping funds in a tax-deferred account longer can be appealing. The account remains invested, and the additional time may fit a household that has other sources of cash flow. Yet waiting until the following April does not eliminate the RMD. It may simply move income into a year when another RMD is also due.

Two taxable distributions in one year can affect more than your federal income tax bracket. Depending on your situation, it may also increase the taxable portion of Social Security benefits, raise Medicare income-related premium adjustments in a future year, affect state tax considerations, or make it harder to manage capital gains and other income. For a family already drawing pension income, Social Security, investment income, or wages, that added distribution may have a meaningful ripple effect.

The right choice depends on the numbers. If your income will be unusually low during your first RMD year but higher the next year, taking the initial RMD before December 31 may be the more measured approach. If the following year will be lower-income, the April 1 option could still deserve consideration. The key is to project both years together rather than viewing the first withdrawal in isolation.

The Still-Working Exception Applies Only in Certain Plans

The rules are different for an employer-sponsored retirement plan such as a 401(k), 403(b), or similar qualified plan. If you are still employed by the company sponsoring that plan, you may be able to delay RMDs from that specific plan until April 1 of the year after you retire.

This exception is not automatic. It generally requires that the plan permit the delay, and it is not available to an employee who owns more than 5% of the business. It also applies only to the retirement plan connected to your current employer. A 401(k) from a previous employer and traditional IRAs generally remain subject to the standard RMD timing rules, even if you continue working elsewhere.

This distinction matters for retirees who return to work part-time or choose to work longer than expected. Continuing employment does not, by itself, pause RMDs across all retirement accounts. Reviewing where each account is held and which rules apply can prevent a missed distribution.

Account Type Makes a Difference

Traditional IRAs, SEP IRAs, SIMPLE IRAs, and many employer retirement plans are commonly subject to lifetime RMD rules. Roth IRAs are different: the original owner does not have to take lifetime RMDs from a Roth IRA. Beginning in 2024, designated Roth accounts in employer plans, such as Roth 401(k) accounts, also no longer have lifetime RMDs for the original owner.

Inherited retirement accounts follow a separate set of rules. The required timing may depend on the relationship to the original account owner, the owner's age at death, and whether the beneficiary is an eligible designated beneficiary. Some beneficiaries may face annual distribution requirements in addition to a deadline to empty the account. Because these rules can be technical and have changed in recent years, inherited accounts should be reviewed individually rather than treated like your own IRA.

Planning the Distribution Before It Becomes a Deadline

An RMD should be part of a retirement-income plan, not a last-minute transaction in December. Start by confirming the prior year-end balance for each applicable account and the correct IRS life-expectancy factor. Your custodian may calculate an RMD for an account, but the account owner remains responsible for taking the proper total distribution.

If you have multiple traditional IRAs, you can generally calculate the RMD for each IRA and take the combined total from one or more of those IRAs. Employer plans are usually handled separately, meaning an RMD from one 401(k) generally cannot be satisfied by taking extra from an IRA. Similar coordination rules can be different for certain 403(b) accounts. The details matter when several accounts have accumulated over a career.

A few planning questions can help shape the decision:

• Will taking two RMDs in one year push household income into a less favorable tax range?

• Are you still working, and does your current employer's plan offer a still-working delay?

• Do you have charitable intentions that may make a qualified charitable distribution appropriate?

• Is there a larger retirement-income plan for withdrawals, cash reserves, health care expenses, and legacy goals?

For IRA owners age 70 1/2 or older, a qualified charitable distribution, often called a QCD, can send eligible IRA funds directly to a qualified charity. A QCD can count toward an RMD while potentially excluding the amount from taxable income, subject to applicable annual limits and requirements. It is not the right choice for every household, but it can be especially valuable for those who already plan to give and do not need the full distribution for spending.

Do Not Miss the Deadline

Missing an RMD can be costly. The excise tax is generally 25% of the amount not withdrawn, though it may be reduced to 10% if the error is corrected within the applicable correction window. Prompt action and careful documentation are essential if a mistake occurs.

More often, the challenge is not a missed deadline but a fragmented plan. One spouse may have several old workplace accounts, the other may be approaching a different RMD age, and both may be balancing Social Security elections, charitable gifts, and future Medicare costs. Those moving pieces deserve coordinated attention.

A thoughtful RMD decision protects more than tax efficiency. It helps preserve flexibility for the years when your family may need it most. A conversation with your tax professional and a trusted retirement planner can clarify whether taking the first RMD this year or delaying it until April serves the larger plan. At Klein Financial WI, that larger plan begins with understanding the income, security, and family priorities behind each distribution decision.