IRS Forces $56,603 401(k) Withdrawals at 73 for $1.5 Million Savers
Updated
Updated · AOL · Sep 8
IRS Forces $56,603 401(k) Withdrawals at 73 for $1.5 Million Savers
3 articles · Updated · AOL · Sep 8
Summary
$1.5 million in a traditional 401(k) would trigger a first required minimum distribution of $56,603 at age 73 under IRS rules, creating a sizable taxable-income hit for retirees.
The withdrawal is calculated by dividing the prior year-end balance by the IRS Uniform Lifetime Table factor of 26.5 for 73-year-olds, and the amount changes annually with age and account value.
That extra income can push retirees into higher tax brackets and also raise Medicare IRMAA surcharges or make more Social Security benefits taxable.
Fidelity data cited in the report showed 769,000 Americans had at least $1 million in 401(k) plans at the end of June 2026, leaving a growing pool of savers exposed to these tax pressures.
The article says one mitigation strategy is drawing down tax-deferred balances before 73, though doing so requires careful planning because taxes may be owed earlier.