An $800K Traditional IRA Forces a ~$30,000 Withdrawal (and Tax Bill) at Age 73

We ran an $800,000 traditional IRA through the IRS Uniform Lifetime Table at age 73. The required minimum distribution that first year comes out to roughly $30,000 — taxed as ordinary income, whether or not the account owner actually needs to spend it that year. That’s the planning surprise most people don’t see coming until it happens: RMDs aren’t a suggestion, and the IRS doesn’t care what else is going on in your tax picture that year.

The math, year by year

The divisor is an IRS estimate of your remaining life expectancy, and it shrinks every year — which means the required withdrawal percentage climbs steadily even if your account balance doesn’t grow at all. By your mid-90s, you’re required to withdraw more than 11% of the account’s value in a single year, a rate high enough to noticeably draw down the principal even with reasonable investment returns.

Why this catches people off guard

Most retirement planning conversations focus on how much you can withdraw — RMDs flip that to how much you must withdraw, regardless of your spending needs that year. A retiree with a paid-off house, modest expenses, and a large traditional IRA can end up with a materially higher taxable income at 73 than they had the year before, purely because of the RMD, potentially pushing into a higher bracket, triggering higher Medicare IRMAA premiums, or making a larger share of Social Security benefits taxable — none of which show up if you only model “how much I need to spend.”

Where this framework doesn’t apply

• Your spouse is your sole beneficiary and more than 10 years younger. You’d use the more favorable Joint Life and Last Survivor table instead of the Uniform Lifetime Table, producing a smaller required distribution.
• You’re charitably inclined. A qualified charitable distribution lets you route some or all of your RMD directly to charity, satisfying the requirement without it counting as taxable income — a materially different outcome than taking the RMD as cash.
• You did Roth conversions before RMDs started. Converting traditional balances to Roth in lower-income years before 73 shrinks the traditional balance (and therefore future RMDs) at the cost of paying conversion tax earlier — a tradeoff worth modeling years in advance, not the year RMDs begin.
• Your account balance won’t grow steadily. A flat growth-rate assumption smooths over real market volatility. A bad sequence of returns right as RMD percentages climb into the high single digits can draw the account down faster than a straight-line projection suggests.

What to actually do

1. If you’re within a few years of 73, run the numbers now — the tax hit is easier to plan around in advance than to react to once it starts.
2. Consider Roth conversions in lower-income years before RMDs begin, to shrink the traditional balance you’ll eventually be forced to draw from.
3. If charitably inclined, look into qualified charitable distributions once RMDs start — they can satisfy the requirement tax-free.
4. Confirm your specific applicable table (Uniform Lifetime vs Joint Life and Last Survivor) with your account custodian, who is required to calculate and report your RMD each year.
5. Set up automatic RMD withdrawals with your custodian to avoid the excise-tax penalty for a missed or late distribution.

For how RMDs fit into a broader draw-down plan alongside taxable and Roth accounts, see which retirement account to drain first and why the order matters, and for the contribution-side decision that shapes your future RMD size, see the 5-point rule for Roth vs traditional.

Open the RMD Calculator → and run your own balance, age, and tax-rate assumptions.