“I Was Really Hoping Not to Have to Work That Long.” A Late-Start Saver Confronts the Age 73 RMD Reality on The Ramsey Show

On the April 22, 2026 episode of The Ramsey Show titled “Stop Living Paycheck to Paycheck, Start Living With Options”, a caller laid out a fear many late starters share but rarely voice:

“I did start a 401k in October… And so there’s only about 2400 in that. I mean, I don’t know if I’m supposed to be, you know, I know you’re supposed to do something with it at 73 years old, but I was really hoping not to have to work that long.”

She had wrapped two anxieties into one sentence. The first is real: a 401(k) balance of $2,400 leaves her far short of a retirement plan. The second is a misunderstanding that steers people into bad decisions: the idea that age 73 is a deadline you must work toward. It is not. Acting on that belief can lead you to delay affordable retirement or panic-save in tax-inefficient ways.

73 is a tax deadline for distributions

The caller’s instinct that something happens at 73 is correct. What happens is a Required Minimum Distribution. Under SECURE Act 2.0, traditional 401(k) and IRA holders must begin withdrawing money at age 73. Ramsey co-host Dave Ramsey said: “at 73… all of your 401k traditional, you’re going to have to begin to withdraw at 73 under the RMD rules whether you want to, whether you want to or not.”

That rule exists because the IRS deferred taxes on every dollar you put into a traditional 401(k). At some point the government wants its cut. The RMD age has nothing to do with when you stop working, when you claim Social Security, or when you’re “allowed” to retire. You can retire at 62, 67, or 80. The 73 trigger is purely about forcing taxable withdrawals from tax-deferred accounts.

The math the caller actually needs

The first-year RMD is calculated by dividing your prior year-end balance by the IRS Uniform Lifetime Table factor, which is roughly 26.5 at age 73. That works out to roughly 4% of the balance in year one.

Run the caller’s situation through it. If she froze her balance at $2,400 and let it sit until 73, her first RMD would be roughly $90. That is not a number anyone needs to keep working to satisfy. The balance is the real problem.

Now flip the scenario. Say she is 55, contributes $500 a month, and earns a 7% average annual return. By 73 she would have around $215,000, and her first RMD would land near $8,100. Still manageable, fully covered by the withdrawal itself, and taxed at her ordinary rate that year. She never needs to keep working to “handle” the RMD.

The teaching point: an RMD is a withdrawal you were going to take anyway in retirement. The IRS is just setting the minimum pace. Treating 73 as a finish line for employment confuses a tax mechanic with a lifestyle decision.

The account type that changes everything

The single factor determining whether RMDs matter to you is what kind of account holds the money. Traditional 401(k) and traditional IRA balances are subject to RMDs at 73. Roth IRAs are not subject to RMDs during the original owner’s lifetime. Roth 401(k)s were brought in line with Roth IRAs starting in 2024, so they are also exempt now.

For a late starter with a small balance, that distinction matters more than the contribution amount. If the caller’s $2,400 is in a Roth 401(k), the age 73 anxiety disappears entirely. If it is in a traditional 401(k), she will eventually face RMDs, but on a balance this size the dollar impact is trivial for years. The bigger question is whether new contributions go Roth or traditional, and at lower current incomes, Roth almost always wins because today’s tax rate is likely lower than the rate she’ll pay pulling money out later.

What to do this week

1. Log into your 401(k) portal and confirm whether contributions are going into the traditional or Roth bucket. If your plan offers a Roth option and your current marginal tax bracket is 22% or lower, switch new contributions to Roth.
2. Use the IRS Uniform Lifetime Table (Publication 590-B) to project your own RMD. Take a realistic balance at 73, divide by 26.5, and see the actual dollar figure. The number is almost always smaller than people fear.
3. Raise your contribution rate by one percentage point this pay period. With the U.S. personal savings rate at 4% in the first quarter of 2026, down from 6% two years earlier, the runway for late starters keeps tightening, and consumer sentiment at 53.3 shows households feel it.

The caller was solving the wrong problem. Age 73 is simply asking her tax-deferred account to start paying taxes. The work she needs to do is on the balance.