Retirement income: how RMDs, Social Security and Medicare fit together

This guide explains retirement income in general terms. It is not advice for your family. Tax rules, ages and premiums change, so check current figures and ask your own CPA before you act.

What does retirement income planning cover?

It covers where your spending money comes from each year, which account you draw from first, and what each choice costs in tax. The pieces are Social Security, pre-tax accounts, Roth accounts, taxable accounts, any pension and your giving.

Most families have more than one source. Each source has its own tax rules and its own timing. Planning means putting them in an order that fits your needs, your health and your goals. It also means leaving room for gifts you want to keep making.

For a Christian family, the plan often has a second purpose. You may want to keep giving to your church, support a ministry or help your children. The Retirement Planning page explains how Seek First frames that work. This guide covers the main moving parts.

What are the key ages in retirement planning?

A few ages drive most decisions. This table lists the ones with a rule behind them, with the source for each.

Your own full retirement age depends on the year you were born. Look it up on SSA.gov before you build a plan around it.

At what age do required minimum distributions start?

For most people today, RMDs start at age 73. The IRS says, “You generally have to start taking withdrawals from your IRA, SIMPLE IRA, SEP IRA, or retirement plan account when you reach age 73.” Check the current rule for your birth year, because Congress has changed the age before.

An RMD is the least you must take from a pre-tax account each year. The IRS says your “withdrawals will be included in your taxable income” except for any part that was already taxed. That means RMDs add to your income whether you need the money or not.

Roth accounts are different. The IRS says “You’re not required to take withdrawals from Roth IRAs” while the owner is alive. That is one reason families look at a Roth conversion. Our Roth conversion questions guide lists what to ask first.

How does the first RMD work?

Your first RMD is due by April 1 of the year after you reach the starting age, but you can take it earlier. The IRS says, “You can make your first withdrawal by December 31 of the year you turn 73 instead of waiting until April 1 of the following year.”

Waiting has a catch. If you wait for April 1, you take two RMDs in that second year, because the next one is due by December 31. Two RMDs in one year can push your income up, with knock-on effects for tax brackets and Medicare. Ask your CPA which timing fits your year.

Here is a made-up example. Say your pre-tax balance at the end of last year was $500,000, and the IRS table gives a distribution period of 25. The RMD would be $20,000. The real figure comes from the IRS table for your age and your account balances, so use your custodian’s number.

What if I miss an RMD?

You can owe a penalty tax. The IRS says, “you may have to pay a 25% excise tax on the amount not distributed as required (10% if withdrawn within 2 years).” You may need to file Form 5329.

Set up a calendar reminder or an automatic distribution. If you have several IRAs and plans, ask your custodian or CPA how the total is figured. A missed RMD is a common and avoidable error.

Can I give my RMD to charity?

Yes, in part. A qualified charitable distribution sends IRA money directly to a charity. The IRS says “A qualified charitable distribution will count towards your required minimum distribution.”

That is a way to give from pre-tax money and meet your RMD at the same step. The age rules, limits and the kinds of charities that qualify are in our QCD guide. For a comparison with a donor-advised fund, read QCD or DAF. The post on RMD age and your giving covers the timing. The glossary entry on qualified charitable distributions is the short version.

When should I start Social Security?

There is no single best age. You can start as early as 62, but your monthly benefit is reduced. If you wait past full retirement age, your benefit grows until age 70. The right choice depends on your health, your spouse’s benefit, your other income and your taxes.

The SSA says, “You can start receiving your Social Security retirement benefits as early as age 62.” It also says benefits “are increased by a certain percentage for each month you delay starting your benefits beyond full retirement age.” The increase stops at 70: “The benefit increase stops when you reach age 70.”

Couples have another layer, because each spouse’s choice affects the household. A planner can compare several start-age pairs side by side. Our glossary entry on Social Security claiming strategy lists the main questions.

Delaying benefits is not free. You live on other savings meanwhile, which may mean drawing from your IRA. That can lower later RMDs, which is one reason the questions link. Work through them in one plan.

How is Social Security taxed?

Part of your benefit may be taxable, depending on your other income. The IRS says, “Your benefits won’t be taxable unless the sum of your modified adjusted gross income (MAGI) plus one half of your benefits received in the tax year is more than the base amount for your filing status.”

Every dollar of IRA withdrawal, RMD or Roth conversion adds to MAGI. So the order you draw from accounts can change how much of your benefit is taxed. Your CPA can run the test with your numbers.

How do Medicare premiums fit in?

Your income can raise your Part B premium. Medicare.gov lists the 2026 standard premium as “$202.90 each month (or higher depending on your income).” The extra amount is the income-related monthly adjustment amount, known as IRMAA.

Social Security sets IRMAA from tax return data. The SSA says, “To determine your 2026 income-related monthly adjustment amounts, we use your most recent federal tax return the IRS provides to us.” So income two years before you pay the premium can matter. A big capital gain or conversion at 63 can show up at 65.

You should also know the sign-up rule. Even if you delay Social Security, the SSA says you “should still apply for Medicare benefits within 3 months of your 65th birthday.” Waiting longer can cost more. Check current Medicare brackets and rules on Medicare.gov and SSA.gov.

What might one year of income look like?

Here is a made-up year, with round numbers and no promise behind them. It shows how the sources can add up and where each one is taxed. Your own numbers will differ.

The same $120,000 of money coming in could carry very different tax bills depending on the mix. That is why the order matters, and why a plan looks at several years, not one.

In what order should I take money from accounts?

There is no one order for everyone. A common starting point is to look at three buckets and compare their tax costs: taxable accounts, pre-tax accounts and Roth accounts. Your tax picture each year decides the mix.

Capital gains follow their own rules. The IRS says, “if you hold the asset for more than one year before you dispose of it, your capital gain or loss is long-term.” Long-term and short-term gains are taxed differently, so sale dates matter. Placing investments in the right account type is called asset location.

Many families blend the sources each year, filling up a chosen tax bracket with pre-tax money and drawing the rest from other accounts. This is a method to discuss with your CPA, not a rule. It changes as tax laws and your income change.

Is there a safe withdrawal rate?

No rate is safe for every family. A safe withdrawal rate is a rule of thumb for how much to take each year. It is a starting point for a talk, not a promise about your money.

Your outcome depends on how long you live, what you spend, what taxes you pay and how markets behave. The order of good and bad years also matters. This is called sequence of returns risk. A bad stretch early in retirement hurts more than the same stretch later, because you are selling while prices are low.

A good plan tests more than one path. It sets a spending floor for needs, a flexible layer for wants and a giving layer you decide on purpose. It then checks the plan each year. Seek First does not promise any result, and no one can.

How do health costs and long-term care fit in?

They sit beside your income plan. Medicare covers some costs and leaves others. Long-term care is the big unknown. The ACL’s LongTermCare.gov says, “Someone turning age 65 today has almost a 70% chance of needing some type of long-term care services and supports in their remaining years.”

That does not mean you will need it, and the amount and length vary. It does mean you should decide how you would pay for care. Our insurance review guide covers the options in plain terms.

What should I bring to a retirement income review?

Bring the documents that show your income sources and costs:

1. A list of every account, with its type and balance.
2. Your Social Security statement.
3. Your last two tax returns.
4. Any pension details.
5. Your monthly spending, split into needs, wants and giving.
6. Your Medicare plan and Part B premium.

Next step

Seek First’s Retirement Planning service is described on the retirement planning page. You can also see how the firm works with families. To talk through your own income plan, schedule a free call for 20 minutes or phone (866) 398-4044.