Direct answer: The first priority in your 70s is meeting your RMD deadline (December 31 each year, except the first year when you can delay to April 1 of the following year) and verifying Social Security is claimed or on track to be claimed by age 70 at the latest. After those two steps, build a two-year cash reserve and simplify accounts.
First Financial Priorities in Your 70s
RMD Deadlines and Rules
Under SECURE Act 2.0, your RMD starting age depends on your birth year. If you were born between 1951 and 1959, your RMD age is 73. If you were born in 1960 or later, your RMD age is 75. Once you reach your RMD age, you must take a distribution from each traditional IRA and 401(k) by December 31 each year. The RMD amount equals your prior-year December 31 account balance divided by your life expectancy factor from the IRS Uniform Lifetime Table.
The penalty for missing an RMD is a 25% excise tax on the amount not distributed. SECURE Act 2.0 reduced this from 50% and added the Correction Window: if you take the missed RMD within two years, the penalty drops to 10%. A correction requires filing IRS Form 5329.
For most people, the simplest approach is to set up automatic annual or monthly withdrawals with your custodian so the deadline cannot be missed.
Social Security: Claim by Age 70
Social Security retirement benefits increase by approximately 8% for each year you delay claiming past your full retirement age (FRA), up to age 70. Claiming at 70 locks in the maximum possible monthly benefit. Once you reach 70, there is no additional benefit to delaying, so anyone who has not yet claimed should do so promptly.
Survivor benefit considerations also matter. A surviving spouse can claim the higher of their own benefit or the deceased spouse's benefit. Coordinating which spouse claims first and when is a meaningful planning decision, particularly when one spouse had significantly higher earnings.
Building a Two-Year Cash Reserve
A two-year cash reserve means holding enough in a high-yield savings account or money market fund to cover two full years of living expenses. This reserve exists so you never have to sell stocks during a market decline to meet near-term income needs.
The reserve is replenished annually from RMDs, Social Security income, or other reliable sources. Holding two years of spending in cash rather than stocks does reduce long-term returns slightly, but it eliminates the most damaging form of sequence-of-returns risk: being forced to sell equities at depressed prices early in retirement.
Account Simplification and Estate Document Review
Investors entering their 70s often have accounts scattered across multiple custodians accumulated over decades. Consolidating IRAs at one or two custodians simplifies RMD calculations, beneficiary management, and overall oversight.
Estate documents should be reviewed at the beginning of your 70s and after any major life change. At minimum, confirm that your will, durable power of attorney, healthcare directive, and beneficiary designations on every account are current. Beneficiary designations override your will, so an outdated designation is a common and serious estate planning error.
Related guides: Account Types in Your 70s, Annual Review Checklist, Estate Planning for Investors
Frequently Asked Questions
What is the RMD deadline each year?
Required Minimum Distributions must be taken by December 31 each year. The one exception is your very first RMD, which you can delay until April 1 of the year following the year you reach your RMD starting age. If you delay your first RMD, you will owe two RMDs in that following year, which can increase your taxable income significantly.
Can I delay my first RMD?
Yes. Your first RMD can be delayed until April 1 of the year after you reach your RMD starting age (73 if born 1951-1959, or 75 if born 1960 or later). However, taking two RMDs in one year doubles the income in that year, which may push you into a higher tax bracket or increase Medicare premiums. Many people take the first RMD in the year they turn the RMD age rather than delaying.
What happens if I miss an RMD?
Missing an RMD triggers a 25% excise tax on the amount not withdrawn. If you correct the missed RMD within two years (the Correction Window under SECURE Act 2.0), the penalty is reduced to 10%. The IRS also has a process for requesting a waiver if the shortfall was due to reasonable error and you take corrective action promptly.