Pensions, RMDs, and the Retirement Income Squeeze at 73

For teachers, municipal workers, veterans, and federal retirees, retirement income rarely arrives from one source. A pension starts, Social Security follows, and then required minimum distributions begin — and each one stacks on top of the last.

The result is a household that had room in the low brackets for a decade suddenly pushed higher, sometimes crossing into higher Medicare premium tiers along the way.

The years between retiring and age 73 are where that outcome is decided. They are usually the lowest-income years of a retirement, which makes them the cheapest years to move money out of pre-tax accounts.

Pension survivor elections deserve the same attention. That decision is often irreversible, and it interacts directly with when the higher earner files for Social Security.

If you carry a pension, model all three income streams on one timeline before you elect any of them.