Starting at age 73, savers with $10 million in traditional 401(k)s or IRAs face substantial required minimum distributions (RMDs) based on IRS life expectancy tables.
At age 73, the RMD on $10 million totals $377,359 annually. At 75, it rises to $406,504. By 80, it reaches $495,050. At 85, the annual withdrawal jumps to $625,000. The IRS calculates RMDs by dividing your account balance by your life expectancy factor from the Uniform Life Table, which adjusts each year as you age.
These large withdrawals trigger three major tax problems. First, RMDs count as ordinary income and can push you into a higher tax bracket. Second, they can trigger Income-Related Monthly Adjustment Amounts (IRMAA) on Medicare premiums. Third, RMDs easily cross the income threshold that taxes 85 percent of your Social Security benefits.
Several strategies can reduce the impact. You can take penalty-free withdrawals in low-tax years before age 73 to gradually reduce your pre-tax balance. You can convert portions of your traditional 401(k) or IRA to a Roth IRA or 401(k) before age 73, since Roth accounts have no RMD requirement. For those over 70½, qualified charitable distributions of up to $111,000 in 2026 to qualified 501(c)(3) charities count toward your RMD while avoiding a taxable event.