Retired teachers must begin 403(b) required minimum distributions at age 73, or 75 if born in 1960 or later, and Green State Credit Union plans which contract pays and how much tax each withdrawal adds. Many retirees assume every 403(b) contract needs its own withdrawal, which isn't quite right.
The IRS lets you total the RMDs for all your 403(b) contracts and take the sum from any one of them, but a 457(b) or an IRA can never cover a 403(b) shortfall. The age-75 start date for anyone born in 1960 or later changed the old advice built around 70½ or 72, and it now splits siblings born a year apart onto different clocks. Below, Green State Credit Union answers what teachers with a pension already in hand tend to ask in a first meeting as their RMD year gets close.
By Michael Donovan, AIF — Chief Investment Officer | Reviewed by David Okonkwo, ChFCMichael leads the investment committee, setting strategic asset allocation guidelines and reviewing manager performance quarterly.
Teachers often hold two or three 403(b) contracts from different years of their career, and the aggregation rule only works if someone adds all three RMD figures together before December 31.
CPA and Tax Director, Green State Credit Union
A QCD is the only RMD strategy that removes income from the tax return entirely, but it only works from an IRA, never directly from a 403(b).
CFP® and Lead Advisor, Green State Credit Union
We size extra withdrawals to the IRMAA brackets two years out, not to this year's return alone, because the Medicare premium hit shows up later.
Senior Financial Planner, Green State Credit Union
When do 403(b) required minimum distributions start if you were born in 1959 or 1960?
If you were born between 1951 and 1959, your first RMD year is the year you turn 73. If you were born in 1960 or later, it's the year you turn 75. That puts a December 1959 birthday and a January 1960 birthday three calendar years apart on the RMD calendar: the first RMD year is 2032 for one and 2035 for the other, even though the birthdays are only weeks apart.
Delaying your first RMD to April 1 of the following year feels like a free extension, but it isn't. Say your first RMD is about $16,260: push it to April 1, and the second RMD of about $16,900 falls in the same calendar year, stacking roughly $33,000 of 403(b) income on top of your pension on one tax return. Most pension-heavy retirees take the first RMD by December 31 of the year they reach their RMD age, for exactly this reason.
One more wrinkle: the still-working exception for a 403(b) only applies to the plan of the employer you currently work for. A retired teacher who takes a part-time job with a different district or employer can't use that exception on the old district's 403(b).
The April 1 trap, in numbers
Why the still-working exception usually doesn't apply
Taking the first RMD by December 31 of your RMD year, instead of waiting until April 1, usually keeps one year's worth of 403(b) income off a single tax return.
- Age 70½: qualified charitable distributions from an IRA become possible
- December 31 before your RMD year: sets the balance used to calculate the amount
- The year you turn 73 or 75: your first RMD year begins
- April 1 of the following year: latest date for the first RMD (often a trap, see above)
- December 31 of that same year: second RMD deadline
- Every December 31 after: ongoing RMD deadline
- January: Form 1099-R arrives reporting the prior year's distributions
- Two years later: Medicare's IRMAA looks back at this income
The first RMD is a division problem
The formula comes first: prior December 31 balance divided by the IRS Uniform Lifetime Table factor, 26.5 at age 73 or 24.6 at age 75. Run that math across three balances and the RMD, and the tax on it, scale in a straight line.
A $1.2 million pre-tax balance creates a first RMD of about $48,780 at 75. Add a $60,000 pension and a single retiree lands around $108,780 of income, just under the first 2026 IRMAA threshold of $109,000. Medicare looks back two years, so one more dollar of MAGI in that RMD year raises the Part B premium two years later, from $202.90 to $284.10 a month at 2026 rates. That's about $974.40 more for that year.
The whole RMD counts as ordinary income. It adds to adjusted gross income, feeds the MAGI Medicare checks two years later, and raises the share of Social Security benefits that gets taxed. Some states tax retirement income and some exempt pensions or 403(b) withdrawals in part, so check your own state's rules.
One practical detail: withholding taken from a December RMD counts as if paid evenly across the year. A retiree who owes estimated tax can simply raise withholding on the RMD payment and skip quarterly vouchers.
Where the IRMAA line sits
The withholding trick
| Prior December 31 balance | $400,000 | $800,000 | $1.2 million |
|---|---|---|---|
| First RMD at 73 | $15,094 | $30,189 | $45,283 |
| First RMD at 75 | $16,260 | $32,520 | $48,780 |
| Tax on RMD at 75, 20% | $3,252 | $6,504 | $9,756 |
| RMD at 75 per month | $1,355 | $2,710 | $4,065 |
| Heir's yearly draw over 10 years | $40,000 | $80,000 | $120,000 |
Does one 403(b) contract's withdrawal cover the RMD on all of them?
Yes, but only among 403(b) contracts. Calculate the RMD on each one (teachers often end up with two or three vendors collected over different decades of teaching), add them up, and take the total from whichever contract you pick, maybe the one with the highest fees or the most conservative fund.
The walls matter as much as the rule. IRAs aggregate only with other IRAs. Each 457(b) and each 401(k) must pay its own RMD on its own. An inherited IRA is figured on its own and can't be covered from your personal accounts. A Roth 403(b) no longer carries lifetime RMDs for the original owner.
A retiree taking $20,000 from her 403(b) to cover both a $16,000 403(b) RMD and a $4,000 457(b) RMD thinks she's done more than enough. The IRS still sees a $4,000 shortfall in the 457(b): a 25 percent excise tax of $1,000, cut to $400 if corrected within the correction window, plus income tax on the extra $4,000 that never needed to leave the 403(b).
Ask each vendor in November for its own RMD figure in writing, then check the total against your own December 31 statements. Vendors calculate only their own contract, never the aggregate across all of them.
Where aggregation stops
Wait, withdraw early or give: Wanda's three options
Wanda, a hypothetical retired elementary reading specialist, turns 75 with two 403(b) contracts worth $300,000 and $100,000 on the prior December 31. $400,000 divided by the IRS factor of 24.6 gives a first RMD of about $16,260, and she takes all of it from the larger contract.
Option 1: take only the minimum starting at 75. Option 2: take extra 403(b) withdrawals in her late 60s and early 70s, while her taxable income is lower. Option 3: starting at 70½, send part of her rollover IRA's RMD to charity as a qualified charitable distribution.
Left alone, the full $400,000 passes to her son, who must empty it within ten years under current rules, about $40,000 per year ignoring growth, stacked on top of his own salary. At an assumed 30 percent rate that's $12,000 in tax every year. The same $40,000 taxed at Wanda's assumed 15 percent rate costs $6,000. Option 2 only saves tax because the income shifts to a lower rate; if her rate and her son's matched, it would just move the bill to an earlier year.
A QCD is the only move here that keeps money off the tax return entirely, but it only works from an IRA and only counts against the IRA's RMD, never the 403(b)'s. Spreading withdrawals saves money only when the rate today is lower than it will be later. Delaying to April 1 saves nothing and usually costs more, as shown earlier.
Before Green State Credit Union suggests extra withdrawals, it projects Wanda's pension, her RMDs at 75, and the IRMAA tier each withdrawal would touch two years out, then sizes the draw to stay under $109,000 of MAGI. It leaves the investment mix in each contract unchanged, so the decision rests on arithmetic, not a guess about markets. Balances can fall as well as rise, and money invested in any of these accounts can lose value, including what she put in.
Option 1: minimum only
Option 2: early extra withdrawals
Option 3: qualified charitable distributions
An RMD that's out can't go back in
Once an RMD is paid, it can't be rolled over, converted to Roth, or returned to the 403(b); the first dollars out in an RMD year count as the RMD itself. Only three things stay changeable: the timing within the year (up to December 31, or April 1 for the first one), the withholding on future payments, and a missed RMD, which you fix by taking it late and filing Form 5329 so the excise tax drops from 25 percent to 10 percent if corrected within the IRS correction window.
Which option fits a pension-heavy retiree?
Option 1 fits a retiree whose pension already uses up her lower tax brackets, whose heirs sit in a similar or lower bracket, and whose pre-tax balance is under about $200,000. At that size the first RMD runs around $8,130 at 75, and the planning gain from doing anything else is small.
Option 2 fits someone with a large 403(b) relative to the pension, several years between retirement and RMD age, and heirs in higher-earning years. Divide your combined pre-tax balance by 25 to estimate your first RMD. If that figure plus your pension would cross $109,000 of income single or $218,000 joint, or a higher tax rate than you pay in your mid-60s, model extra withdrawals before RMD age begins.
Option 3 fits someone who already gives to a church or charity every year and has an IRA (a rollover IRA counts). Giving the same amount by check from taxable money leaves the full RMD on the return; a QCD doesn't. The 403(b) rollover page covers when moving money into an IRA makes sense.
None of the three removes the tax on pre-tax money for good, except the QCD. And this page doesn't cover a beneficiary's own RMD schedule on an inherited IRA beyond the fact that it's figured separately from your own accounts.
Who should just take the minimum
Who should model extra withdrawals
Questions about 403(b) required minimum distributions
I substitute-teach two days a week for the district I retired from; does that let me delay the RMD on my old 403(b)?
No. The still-working exception only applies to the 403(b) of the employer you're currently employed by, and substitute work usually doesn't count as the kind of continued employment the exception requires. Your old district's 403(b) still follows the regular start age of 73 or 75, regardless of your sub schedule.
Can I change the tax withholding on my 403(b) RMD after the payment has already gone out?
You can change withholding on future payments, but not on one already paid; that payment is final once issued. The IRS treats withholding as spread across all four quarters no matter which month it comes out. Many retirees use that rule to raise withholding on a December RMD and close an underpayment without filing quarterly estimates.
My dad has 403(b) contracts with three different vendors plus his pension; how do we keep any of his RMDs from being missed?
Ask each 403(b) vendor in November for that contract's own RMD figure in writing, add the figures together, and confirm the total against his December 31 statements. Vendors never calculate the combined amount for him, so someone has to add the three figures by hand.
Do 403(b) RMDs raise my Medicare Part B premium, and how soon would I see it?
RMD income adds to the modified adjusted gross income the Social Security Administration checks for IRMAA, and that check looks back two years. An RMD taken this year could raise your Part B premium starting in roughly two years, not immediately.
Green State Credit Union maps your first RMD year with you
Green State Credit Union advisors gather every 403(b), 457(b) and IRA balance as of December 31, figure each RMD and the aggregate, and show which contract could pay it and what it adds to your tax return and Medicare premiums. Working with us takes at least $500,000 in investable assets. Sending the request form gets you an introductory call, and our fee is set out in a signed agreement before we start on your numbers.
Spreading withdrawals saves tax only when the rate today is lower than it will be later; otherwise it just moves the bill to an earlier year.
Where the rules come from
This is general information, not personalized investment, tax, or legal advice. Investing involves risk, including loss of principal. Before making decisions about your retirement or investments, consult a qualified professional about your own circumstances.