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What to know before taking your first required minimum distribution

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Grace Cary | Moment | Getty Images

After decades of building your nest egg, you will eventually have to start taking required minimum distributions, or RMDs, from pretax retirement accounts. The first RMD can be tricky, according to financial experts.

Since 2023, most retirees must begin RMDs at age 73. The first deadline is April 1 of the year after you turn 73, and Dec. 31 for future withdrawals. This applies to tax-deferred individual retirement accounts, most 401(k) and 403(b) plans.

“You want to be tactical and savvy when you take the [first] distribution,” said certified financial planner Jim Guarino, managing director at Baker Newman Noyes in Woburn, Massachusetts. He is also a certified public accountant. 

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Pre-tax retirement withdrawals incur regular income taxes. By comparison, you’ll pay long-term capital gains taxes of 0%, 15% or 20% on profitable assets owed for more than one year in a brokerage account.  

Two required withdrawals in one year

For example, boosting AGI can lead to income-related monthly adjustment amounts, or IRMAA, for Medicare Part B and Part D premiums. For 2024, IRMAA kicks in once modified adjusted gross income, or MAGI, exceeds $103,000 for single filers or $206,000 for married couples filing together.

“That’s the biggest one that catches retirees off guard,” Berkemeyer said.

With a higher AGI, lower-earning retirees could also incur higher Social Security taxes or increase their long-term capital gains bracket from 0% to 15%, he said.

When to defer your first distribution

If you’re age 73 and just retired in 2024, it could make sense to delay your first RMD until April 1, because 2025 could be a lower-income year, experts say. 

However, your RMD is calculated using your pre-tax retirement balance as of Dec. 31 from the prior year, meaning 2025 RMDs are based on year-end 2024 balances. The calculation divides your previous year-end pretax balance by an IRS life expectancy factor.

That could mean a larger-than-expected RMD for 2025 “if your [2024] portfolio went through the roof,” Guarino warned. 

“You really have to run the numbers” to see if it makes sense to incur more income in 2024 or 2025, based on account balances and tax projections, he said.

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Personal Finance

What Trump, Harvard battle over international student visas may cost

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Rep. Khanna on foreign student ban: International students contribute $44B to the American economy

The escalating battle between the Trump administration and Harvard University over international student visas could come at a high economic cost.

Altogether, international students who studied in the U.S. contributed $43.8 billion to the U.S. economy in the 2023-24 academic year, according to the most recent data by NAFSA: Association of International Educators. In Massachusetts, alone, international students contributed nearly $4 billion and supported more than 35,000 jobs.

At Harvard, the share of international students is disproportionately high compared to most other colleges and universities. International students accounted for 27% of Harvard’s total enrollment in the 2024-25 academic year, up from 22.5% a decade earlier.

With more than 6,000 international students, Harvard supports over 1,125 local jobs and contributes $180 million to the greater Boston economy, largely through student spending, according to a new analysis by Implan, an economic software and analysis company.

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A ban on international enrollment could destabilize a vital revenue stream, said Bjorn Markeson, an economist at Implan.

“Because Harvard has a very high international student population, it’s going to have more of that impact,” Markeson said. “The economy is a network structure, so dollars flow through. They don’t just stay in one place — and when something hits Boston, it affects New England as a whole.”

A Harvard University student walks through Harvard’s campus. 

Erin Clark | Boston Globe | Getty Images

Schools have increasingly sought out international students “because they compliment the student body, and that benefits all students,” said Robert Franek, The Princeton Review’s editor-in-chief.

But foreign students also typically pay full tuition, which makes international enrollment an important source of revenue for Harvard and many colleges and universities in the U.S., according to Franek. 

Where the Trump, Harvard battle stands

For now, the fate of international enrollment at Harvard and elsewhere is still up in the air.

Tensions between the federal government and the Ivy League university have continued to escalate after Harvard in April refused to meet a set of demands issued by the Trump administration’s Task Force to Combat Anti-Semitism.

In May, President Donald Trump attempted to ban Harvard from enrolling international students, but a federal judge issued a temporary restraining order on Friday “to maintain the status quo.”

U.S. District Judge Allison Burroughs said the restraining order would remain in effect until June 20. Meanwhile, Harvard President Alan Garber said that “contingency plans are being developed to ensure that international students and scholars can continue to pursue their work at Harvard this summer and through the coming academic year.”

In an interview with NBC News on Friday, U.S. Secretary of Education Linda McMahon said Harvard needs to do more to combat antisemitism on campus and screen admissions of foreign students.

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Supreme Court gives DOGE access to personal Social Security data

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A sign in front of the entrance of the Security Administration’s main campus on March 19, 2025 in Woodlawn, Maryland. 

Kayla Bartkowski | Getty Images

The Supreme Court on Friday granted the Department of Government Efficiency access to Social Security Administration data that includes sensitive personal information of millions of Americans.

The decision comes as the federal government sought a stay, or temporary suspension, after a federal judge blocked DOGE’s access to that data in April. The nation’s highest court granted an emergency application from the Trump administration to lift that injunction; the case is expected to proceed in lower courts.

In its decision, the Supreme Court concluded the Social Security Administration may give DOGE access to agency records while the case plays out “in order for those members to do their work.”

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Both the White House and the Social Security Administration called the Supreme Court decision a victory. In a statement, White House spokesperson Elizabeth Huston said it will allow the Trump administration to “carry out commonsense efforts to eliminate waste, fraud and abuse and modernize government information systems.”

Likewise, Social Security Commissioner Frank Bisignano in a statement said the agency “will continue driving forward modernization efforts, streamlining government systems, and ensuring improved service and outcomes for our beneficiaries.”

Yet others expressed grave concern in reaction to the decision, including Justice Ketanji Brown Jackson, advocacy groups and plaintiffs in the case against DOGE and the Social Security Administration.

“This is a sad day for our democracy and a scary day for millions of people,” said the coalition of plaintiffs including American Federation of State, County and Municipal Employees; the American Federation of Teachers; and the Alliance for Retired Americans, who are represented by Democracy Forward.

“This ruling will enable President Trump and DOGE’s affiliates to steal Americans’ private and personal data,” they said, while vowing to “use every legal tool at our disposal” to prevent the misuse of public data as the case moves forward.

Millions of Americans’ sensitive data at stake 

The dispute focuses on how much access DOGE should have to Americans’ personal data.

The plaintiffs filed an initial complaint in early March, stating the Social Security Administration had “abandoned its commitment to maintaining the privacy” of the sensitive personal information of millions of Americans under DOGE’s influence.

The Social Security Administration collects and stores some of the “most sensitive” personally identifiable information of millions of Americans, ranging from seniors to adults to children, the complaint notes.

When applying for a Social Security number, the agency requires the disclosure of place and date of birth, citizenship, ethnicity, race, sex, phone number and mailing address. It also requires parents’ names and Social Security numbers.

But the agency is also privy to other personal data, including personal health information, the complaint notes. That includes:

  • driver’s license and identification information
  • bank and credit cards
  • birth and marriage certificates
  • pension information
  • home and work addresses
  • school records
  • immigration and naturalization records
  • family court records
  • employment and employer records
  • psychological and psychiatric health records
  • hospitalization records
  • addiction treatment records
  • records for HIV/AIDS tests

The Social Security Administration also collects tax information, including total earnings, Social Security and Medicare wages and annual employee withholdings.

What you need to know about Social Security

DOGE has not only accessed the agency’s sensitive and protected information; it has also publicly shared it, according to the complaint. The actions of the defendants, including the Social Security Administration, DOGE and leaders including former head Elon Musk, have deprived Americans of privacy protections guaranteed by federal law and made their personal information vulnerable, the complaint alleges.

In her dissent, Jackson, joined by Justice Sonia Sotomayor, notes that records show “DOGE received far broader data access” than the Social Security Administration usually allows in fraud, waste and abuse investigations. Typically, those investigations start with high level, anonymized data, with more access to more detailed information only granted as necessary.

Justice Elena Kagan also dissented in the 6-3 decision.

“The government wants to give DOGE unfettered access to this personal, non-anonymized information right now – before the courts have time to assess whether DOGE’s access is lawful,” Justice Jackson wrote.

While litigation is pending, the government has asked to temporarily suspend the lower court’s temporary limitations on DOGE’s access to Social Security data, she noted.

“But the government fails to substantiate its stay request by showing that it or the public will suffer irreparable harm absent the court’s intervention,” Justice Jackson wrote.

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Student loan borrower in SAVE forbearance says interest growing

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Los Angeles, CA – May 17: Signage and people along Bruin Walk East, on the UCLA Campus in Los Angeles, CA, Wednesday, May 17, 2023.

Jay L. Clendenin | Los Angeles Times | Getty Images

An unexpected $3,000 in interest

Ellie Bruecker

Courtesy: Bruecker Family

Despite the government’s promises, Bruecker’s student debt has grown by around $3,000 during the roughly year-long SAVE reprieve, her loan documents show.

“I saw those numbers and my eyes bugged out of my head,” said Bruecker, 34.

She’s not the only SAVE borrower seeing interest accruing: Other people facing the same issue have taken to social media to try and get answers.

At one point, around 8 million people were enrolled in the SAVE plan, according to the Education Dept.

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Bruecker happens to work as the director of research at The Institute for College Access & Success, a nonprofit that does advocacy work in the higher education space. But she wonders how many student loan borrowers will even know that this wasn’t supposed to happen, let alone be able to get it corrected.

“Will they resolve this for everyone, or just those who get them on the phone and are loud about it?” she said.

Advocate: Check your loan history

It’s unclear how widespread the issue is.

A spokesperson for the Education Dept. did not answer CNBC’s questions about the issue some borrowers are facing, but said that those “enrolled in the SAVE Plan remain in a forbearance that is not accruing interest.”

Mohela did not immediately respond to a request for comment.

But Mohela has a notice at the top of its website that reads: “If you recently received an interest notice for your student loan account, please know that this is not a bill, and no action is necessary at this time.”

The notice goes on to say that, “For borrowers on the SAVE administrative forbearance, interest is currently set at 0%. Refer to your loan details in your notice.”

The company does not say that the alerts were sent in error, but they likely were, said higher education expert Mark Kantrowitz.

“MOHELA sent out misleading notices to their borrowers who are in the SAVE repayment plan,” Kantrowitz said.

“Borrowers who are worried about the MOHELA letter should check their loan history to see if the balance has changed,” Kantrowitz added. If their debt has grown since July 2024, “they should contact MOHELA,” he said.

Educator and former U.S. Representative Dr. Jamaal Bowman speaks to hundreds of students from Washington, DC universities protesting U.S. President Donald Trump’s dismantling of and funding cuts to the Department of Education, in Washington, D.C., U.S. April 4, 2025. 

Allison Bailey | Reuters

Bruecker said her loan records from both Mohela and the Education Dept. reflect a higher balance after roughly around $3,000 in interest was added to her debt during the forbearance.

“Mohela has been allowing interest to accrue the entire time my loans have been in this SAVE forbearance,” she said.

She tried to contact Mohela to correct the error, but said she was unable to reach a representative despite waiting on the phone for hours.

In recent months, the Trump administration has terminated around half of the Education Department’s staff, including many of the people who helped assist borrowers when they ran into issues like this one. A federal judge has ordered Trump officials to reinstate the terminated employees, but the administration is now asking the Supreme Court to block that order.

“With the level of dysfunction at the Education Department right now, I have a real distrust this is going to get resolved for people,” Bruecker said.

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