Large RMDs at 73 Can Push Retirees Into Higher Tax Brackets — and Raise Medicare Premiums

Large RMDs can push retirees into higher marginal tax brackets — and raise Medicare premiums. That’s the financial pivot at age 73, when the IRS requires withdrawals from most tax-deferred retirement accounts. These required minimum distributions count as ordinary taxable income, even if spending habits haven’t changed. More income means taxes go up — not just on returns, but on Social Security benefits too. Higher adjusted gross income can trigger taxation of up to 85% of those benefits. It also activates IRMAA, the mechanism that scales Medicare Part B and Part D premiums with income. A single large withdrawal could lock in higher monthly costs for up to two years. Yet many retirees take the full distribution at once, unaware of the cascade. Spreading withdrawals, executing partial Roth conversions in low-income years, and coordinating taxable and tax-deferred account draws can smooth income. The goal isn’t to avoid taxes — it’s to avoid paying more than necessary, unnecessarily.