Retirees With Over $1.5 Million in a Traditional 401(k) Are Being Warned About This $43,000 Annual RMD at 73 Quick Read – $1.5M traditional 401(k) at 73 produces $56,604 first-year RMD taxable at 22% plus 40% combined IRMAA and Social Security tax – Convert to Roth annually…
fore 73 up to 22% bracket top to permanently shrink RMD base and avoid future tax surprises – Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today
Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; learn more here. The math hits different once you read it on an IRS worksheet.
A 73-year-old with $1.5 million in a traditional 401(k) divides that balance by the 26.5 factor in the IRS Uniform Lifetime Table and ends up with a first-year required minimum distribution of $56,604. That is taxable income landing on top of Social Security, pension payments, dividends, and interest, and it grows almost every year for the rest of the retiree’s life. This conversation is showing up across Bogleheads threads and r/retirement: people born between 1951 and 1959 who maxed out pretax contributions for 30 years now realize the bill they deferred is due.