Financial advisor Suze Orman argues waiting for required minimum distributions can cost retirees tens of thousands in taxes.
Personal finance expert Suze Orman criticized advice to leave retirement funds untouched until required minimum distributions (RMDs) begin. On an October 10, 2024 podcast, she called the strategy “the stupidest thing I ever heard” after a caller with a $125,000 Thrift Savings Plan (TSP) was told to wait.
Orman noted retirees aged 60-72 often face lower tax brackets before RMDs start at age 73 or 75. Delaying withdrawals or Roth conversions during this window can lead to higher lifetime taxes. Current rules set RMDs at 73 for those born between 1951-1959 and 75 for those born in 1960 or later.
Orman’s analysis suggests strategic withdrawals in early retirement could save tens of thousands in taxes, avoiding a tax ambush in later years.