Turn 74 Any Time After 2032 and Your First RMD Comes at 75, Not 73. That Means Extra Years to Convert, and Plenty of Retirement Plans Are Still Built on the Old Age

The real focus here is the age when required minimum distributions start. Better known as RMDs for short, these are annual withdrawals mandated by the IRS that require owners of traditional IRAs and 401(k)s to take. A lot of retirement projections still assume RMDs begin at 73. For many people in their 60s, though, federal law sets that age at 75. Those extra years change how much time you have to plan for taxes.

This age group holds a large share of retirement savings. Households headed by someone age 55 to 69 held 49.5% of all defined contribution pension assets and annuities in 2026 Q2. Those balances are the ones RMD rules eventually reach.

What Section 401(a)(9)(C)(v) Says About the Start Age

The rule sits in Section 401(a)(9)(C)(v) of the Internal Revenue Code, which SECURE 2.0 revised, and it sets the “applicable age,” meaning the age that starts the RMD clock. If someone reaches age 72 after December 31, 2022, and age 73 before January 1, 2033, their applicable age is 73.

A second clause covers the younger group. If someone reaches age 74 after December 31, 2032, their applicable age is 75. In practice, people born from 1951 through 1959 fall under 73, and people born in 1960 or later fall under 75 (1959 or earlier, 73; 1960 or later, 75).

How the IRS Settled the 1959 Overlap

The drafting left one birth year unclear. Someone born in 1959 turns 73 in 2032 and 74 the next year, so they seem to fit both clauses. Treasury and the IRS took this up in proposed regulations published on July 18, 2024, under the heading “Determination of Applicable Age for Employees Born in 1959.” Under the IRS position, that cohort’s applicable age is 73.

So the later age effectively starts with the 1960 cohort, whose members turn 75 in 2035. IRS guidance lets the first withdrawal wait until April 1 of the year after the applicable age is reached.

Why Two Extra Years Matter for Roth Conversions

A Roth conversion transfers funds from a traditional account to a Roth account. Tax is due now on the amount converted, and qualified Roth withdrawals later are generally tax-free. The years between retirement and the first RMD are often a household’s lowest-income years, and the later age adds 2 more of them (we sized up that quiet stretch between the last paycheck and the first RMD in a Roth guide here: The Roth Window).

Current brackets show how much room each year has. For 2026, the IRS sets the top of the 12% bracket at $100,800 of taxable income for joint taxpayers and $50,400 for single taxpayers. The standard deduction is $32,200 for joint filers and $16,100 for single filers, and it shelters income before any bracket applies.

The delay also involves a trade-off: money left untouched for two more years can keep growing, and required withdrawals are calculated by dividing the year-end balance by a factor from the IRS Uniform Lifetime Table. A larger balance means larger required withdrawals, which could push you into higher brackets later. Missing an RMD triggers a 25% excise tax on the shortfall under Section 4974(a). The tax effect of the extra years depends on how you use them.

Social Security, Medicare and Charitable Giving Timing

When someone delays Social Security, their taxable income stays lower in the meantime, which leaves more room for conversions. Conversions also raise modified adjusted gross income, which Medicare uses to set premium surcharges. The standard Part B premium for 2026 is $202.90. Surcharges begin above $109,000 for single filers and $218,000 for joint filers.

Qualified charitable distributions didn’t move with the RMD age. These are gifts sent directly from an IRA to a charity, and they don’t count toward taxable income. Under Section 408(d)(8)(B)(ii), they’re still available starting at age 70½. For the 1960-and-later group, that leaves about 4.5 years when charitable distributions are open but RMDs haven’t started yet.

Rules That Stayed Exactly Where They Were

The age at which early withdrawals stop carrying a penalty is still 59½ under Section 72(t). Before that age, the extra tax is 10% of the taxable amount. Inherited accounts run on their own schedule. IRS Publication 590-B says that for most beneficiaries, all distributions must be made by the end of the 10th year after death, with exceptions for certain eligible designated beneficiaries.

Checking a Plan Against the Correct Age

Retirement software, older spreadsheets, and some adviser projections may still put in 73 by default. For anyone born in 1960 or later, that triggers required withdrawals two years earlier. It also shrinks the conversion window and can misstate future tax bills. Comparing the RMD start year in a projection with the statute is a quick check.

The applicable age depends on the account owner’s birth date. A birth year of 1959 or earlier points to 73. A birth year of 1960 or later points to 75, with the first withdrawal due in the year that birthday comes around.

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