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My husband will be 73 years old on November 16, 2027. How much RMD should he withdraw in 2027 and should he do so between November 16 and December 31, 2027? What percentage of his pension assets should he withdraw each year after that? Is it also correct that he should withdraw from each of his IRAs? Or can he withdraw all from one or two of his accounts, as long as the total withdrawals represent the required percentage of his total portfolio of qualified assets?
– Marisa
When planning retirement withdrawals, required minimum distributions (RMDs) play a central role in determining when and how much retirees should withdraw from their deferred retirement accounts, such as traditional IRAs and 401(k)s. For those approaching age 73, like your spouse, these rules ensure that retirement money is used as intended during your lifetime, rather than being deferred indefinitely.
And how much should your husband withdraw when he turns 73? It depends. We’ll show you how to determine RMD amounts and provide an example calculation that will hopefully help with your own process.
Need help planning RMDs or making other strategic decisions after retirement? Talk to a financial advisor and see how they can help you.
When your husband turns 73 on November 16, 2027, he will be required to complete a mandatory RMD for that year. To calculate the exact RMD for 2027, you need the following data:
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Account balances as of December 31, 2026: The RMD is based on the previous year’s closing account balances. These accounts include traditional IRAs, 401(k)s, 403(b)s, 457(b)s, and self-employed retirement plans such as SEPs and SIMPLE IRAs. Please note that Roth IRAs are not included in the calculation. Later we will discuss which accounts can be aggregated and which must be approached separately.
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Divisor of life expectancy: This is a number from the IRS’s Uniform Lifetime Table or Joint Life Expectancy Table, depending on your spouse’s age and, if applicable, your age as a spouse.
For someone living to age 73, the life expectancy divisor from the IRS’s Uniform Lifetime Table is currently 26.5. This factor may change between now and 2027, so check the table for updates before early 2027. Also make sure you use the correct table depending on your circumstances (Uniform or Joint Life, as mentioned above).
To calculate your husband’s RMD when the time comes, divide his December 31, 2026 balance by the appropriate divisor. For example, if his IRA has a closing account balance of $1 million, the calculation would look like this (assuming use of the Uniform Lifetime table and 2024 divisors):
RMD = $1,000,000 / 26.5 ≈ $37,736
If you have multiple retirement accounts that are RMD eligible, you must calculate the RMD associated with each account separately. The sum of these individual values is your total RMD for the year.
(And if you have any questions about RMDs or other retirement planning topics, consider talking to a financial advisor.)
The IRS requires RMDs to be taken before the end of the calendar year (December 31), with no requirement tied to date of birth in that year. This means that your husband’s RMD 2027 can be withdrawn anytime between January 1 and December 31. However, the IRS allows you to delay your first RMD until April 1 of the following year. As a result, your husband could choose to delay his first RMD until April 1, 2028, although this would mean making two distributions in 2028: one for 2027 and one for 2028.
Most retirees prefer to take the first RMD in the year they turn 73 to avoid doubling the RMD in the following tax year. The decision depends on several personal factors, including your own preferences and your cash flow situation, among others.
After making the first distribution, calculate future RMD amounts in the same manner as described previously, taking into account the prior year’s final account balances and the relevant age divisor. In practical terms, the RMD rate starts around 4% at age 73 and increases incrementally each year. These rising rates mean retirees are getting more out of their accounts as they age, potentially reducing the balance subject to future taxes.
If his portion of your group pension cost exceeds his annual RMD, he may need to withdraw more than the required minimum.
To estimate a sustainable withdrawal rate, consider a number of factors:
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Life expectancy and healthcare costs: Estimating longevity and potential healthcare costs can help you plan conservatively. Of course, be sure to factor in the presence of things like long-term care insurance if you have a policy.
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Investment returns: The performance of his retirement assets will impact his ability to support withdrawals. Investment performance will also affect the size of withdrawals as the numerator is the account balance.
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Other sources of income: Income from Social Security and other sources such as a pension can offset the required amount of retirement accounts to some extent, although he will still have to meet the “minimum” criteria with RMDs.
(Retirement income planning can be complex, so you may want to work with a fiduciary financial advisor who specializes in retirement planning.)
A common misconception is that RMDs must be withdrawn from each retirement account separately, which is not the case in all scenarios, even though the calculations are done on an account-by-account basis.
If your husband has multiple IRAs, he can take the total RMD amount for all IRAs from a single account or a combination of IRA accounts. This includes standalone retirement accounts such as SEPs and SIMPLE IRAs. The flexibility this provides can simplify withdrawals, especially if the assets in one account have outperformed or have lower fees, allowing for more strategic choices.
401(k) accounts are different. Unlike IRAs, RMDs for 401(k) accounts must be withdrawn separately from each account. If your husband has multiple 401(k)s from previous employers and has not consolidated them, then each of them will have to meet its own RMD requirement unless he chooses to roll over these funds into a single IRA, which is could simplify the process. However, before pursuing a rollover for strategic reasons, consider the investment choices, fees, and benefits available in each plan.
403(b) plans are more similar to IRAs in that RMDs for multiple accounts can be combined and taken from one or more 403(b)s. You follow the same process as with IRAs if you want to draw from a single account: calculate the RMDs for each account separately, then decide which account(s) you want to take the distribution from.
(And if you need help finding financial advice, our quiz matches you with up to three fiduciary advisors who have passed a rigorous vetting process.)
Developing a good RMD strategy starts with understanding the rules. Once you have a good understanding of the rules and process, you can start thinking about the different accounts you own that are covered by RMDs. From here, you can personalize your approach so that you and your husband can effectively navigate RMDs, ensuring the money is withdrawn in a tax-efficient manner and supporting financial security in retirement.
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Note that RMDs count as income in the year the withdrawal is made. If you plan to delay your first RMD until the year after you reach RMD age, you must still earn your second RMD in that same year. This could leave you with more income than you expected and a hefty tax bill, highlighting the importance of planning ahead.
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A financial advisor can help you create a retirement plan that takes into account your RMDs and other sources of income. Finding a financial advisor does not have to be difficult. SmartAsset’s free tool matches you with up to three vetted financial advisors serving your area, and you can have a free introductory meeting with your advisors to decide which one you think is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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Jeremy Suschak, CFP®, is a SmartAsset financial planning columnist who answers reader questions about personal finance topics. Do you have a question that you would like answered? Email AskAnAdvisor@smartasset.com and your question may be answered in a future column.
Jeremy is a financial advisor and head of business development at DBR & CO. He received compensation for this article. Additional author resources can be found at dbroot.com.
Please note: Jeremy is not a SmartAdvisor AMP participant, not a SmartAsset employee, and has been compensated for this article.
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The post Ask an Advisor: My husband’s RMDs start in 2027 and he has multiple IRAs. What is the best strategy? first appeared on SmartReads by SmartAsset.
