Is $900,000 Enough to Outlast RMDs? The Math at Age 73 Is More Reassuring Than You Think

"The IRS Uniform Lifetime Table sets the divisor at 26.5 for a 73-year-old. Divide $900,000 by 26.5 and the first RMD is roughly $33,960, or about 3.77% of the portfolio. That figure is smaller than the 4% safe withdrawal rate that retirement planners have used as a benchmark for decades. The RMD is not a crisis withdrawal."

"A diversified portfolio targeting 7% annual returns on $900,000 would generate roughly $63,000 in growth in year one. The $33,960 RMD does not consume the annual return. The portfolio ends the year larger than it started, even after the distribution. With the 10-year Treasury yielding 4.21% as of March 11, 2026, a blended 7% return assumption is reasonable."

"The portfolio does not shrink. It grows. RMDs increase modestly each year as the balance rises and the IRS divisor decreases, but the annual distribution never overtakes the growth engine of a properly invested account."

Required minimum distributions often trigger anxiety among retirees, but the mathematics reveal a more favorable reality. Under SECURE Act 2.0, RMDs begin at age 73 for those born 1951-1959 and age 75 for those born 1960 or later. For a 73-year-old with $900,000, the first RMD equals approximately $33,960, or 3.77% of the portfolio—below the traditional 4% safe withdrawal rate. A diversified portfolio targeting 7% annual returns generates roughly $63,000 in growth annually, exceeding the RMD amount. Consequently, the portfolio continues expanding despite mandatory distributions. With Treasury yields at 4.21% and historical equity premiums, a 7% blended return assumption remains reasonable. Over a 10-year period, RMDs increase modestly as portfolio balances rise, yet annual distributions never exceed the growth generated by properly invested accounts.

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