Financial Disclaimer: This is informational content, not financial advice. Consult a qualified financial professional for your specific situation.

Required Minimum Distributions: Rules, Calculations, and SECURE 2.0 Changes

Key Takeaways

RMDs are mandatory annual withdrawals from Traditional IRAs, 401(k)s, and other pre-tax accounts starting at age 73 (age 75 for those born after 1959)

The penalty for missing an RMD was reduced from 50% to 25% by SECURE 2.0 — and drops to 10% if corrected within two years

Roth IRAs are exempt from RMDs for the original owner; Roth 401(k)s became exempt starting in 2024

RMDs can push you into higher tax brackets and trigger Medicare premium surcharges (IRMAA) if not planned carefully

Required minimum distributions exist because Congress granted tax deferrals on retirement savings with an expiration date. The government wants its tax revenue eventually, so it forces you to withdraw — and pay income tax on — a gradually increasing percentage of your pre-tax retirement accounts each year. Failing to take your RMD triggers one of the steepest penalties in the tax code, though SECURE 2.0 made the consequences somewhat less severe.

When Do RMDs Begin?

Age-Based Starting Rules

Birth Year	RMD Starting Age	First RMD Deadline
1950 or earlier	72	Already started
1951-1959	73	Year you turn 73
1960 or later	75	Year you turn 75

If you turn 73 in 2026 (born in 1953), your first RMD must be taken by April 1, 2027. However, delaying to April 1 means you must take two RMDs in 2027 — the first (for 2026) by April 1 and the second (for 2027) by December 31. This double-RMD year can push you into a significantly higher tax bracket.

Recommendation: Take your first RMD by December 31 of the year you turn 73, not the April 1 grace period, unless you have a specific tax reason for doubling up.

Which Accounts Require RMDs?

Account Type	RMDs Required?	Notes
Traditional IRA	Yes	Starting at 73 (or 75)
Traditional 401(k)	Yes	Unless still working for that employer
403(b)	Yes	Same rules as 401(k)
SEP IRA	Yes	Treated as Traditional IRA
SIMPLE IRA	Yes	Treated as Traditional IRA
Roth IRA	No	Exempt for original owner
Roth 401(k)	No	Exempt starting 2024 (SECURE 2.0)
Inherited Roth IRA	Yes	Subject to beneficiary rules

Still-working exception: If you are still employed and participating in your current employer’s 401(k), you can delay RMDs from that specific plan until you retire. This does not apply to IRAs or plans from previous employers.

How to Calculate Your RMD

Step-by-Step Calculation

Determine your account balance as of December 31 of the prior year. For 2026, use your December 31, 2025 balance.
Find your life expectancy factor from the IRS Uniform Lifetime Table (Table III). This is the table used by most account holders.
Divide the balance by the factor.

Uniform Lifetime Table (Selected Ages)

Age	Distribution Period	Approx. RMD %
73	26.5	3.77%
74	25.5	3.92%
75	24.6	4.07%
76	23.7	4.22%
77	22.9	4.37%
78	22.0	4.55%
80	20.2	4.95%
85	16.0	6.25%
90	12.2	8.20%
95	8.9	11.24%

Exception: If your sole beneficiary is a spouse more than 10 years younger, use the Joint Life and Last Survivor Expectancy Table (Table II), which produces a smaller RMD.

Worked Example

Account balance (12/31/2025): $800,000 Age in 2026: 75 Distribution period: 24.6 RMD calculation: $800,000 / 24.6 = $32,520

You must withdraw at least $32,520 from this account in 2026. You can always withdraw more — the RMD is a floor, not a ceiling.

Multiple Accounts

If you have multiple Traditional IRAs, you calculate the RMD for each separately but can take the total RMD from any one IRA or combination of IRAs. You cannot, however, satisfy a Traditional IRA RMD with a 401(k) withdrawal, or vice versa. Each plan type’s RMD must be satisfied from that plan type.

SECURE 2.0 Changes to RMDs

The SECURE 2.0 Act of 2022 made several significant changes that are now fully in effect:

1. Age Increase to 73 and 75

The original SECURE Act raised the RMD age from 70.5 to 72. SECURE 2.0 raised it further to 73 (effective 2023) and to 75 (effective 2033 for those born in 1960 or later). This extra delay allows two additional years of tax-deferred growth.

2. Penalty Reduction

The excise tax for a missed RMD was cut from 50% to 25%. If you correct the shortfall within two years (by taking the missed distribution and filing an amended return or a corrective distribution), the penalty drops to just 10%.

Example: If your RMD was $30,000 and you missed it entirely:

Old penalty (pre-2023): $15,000 (50%)
New penalty: $7,500 (25%)
Corrected within 2 years: $3,000 (10%)

3. Roth 401(k) RMD Elimination

Before SECURE 2.0, Roth 401(k) accounts were subject to RMDs even though Roth IRAs were not. Starting in 2024, Roth 401(k)s are exempt from RMDs for the original account owner. This eliminates the need to roll Roth 401(k) balances to a Roth IRA solely to avoid RMDs.

4. Qualified Charitable Distributions (QCDs)

QCDs allow you to direct up to $108,000 (2026 limit, indexed for inflation) from your IRA directly to a qualified charity. The distribution satisfies your RMD but is excluded from taxable income. This is one of the most tax-efficient charitable giving strategies available to retirees.

Requirements: You must be 70.5 or older, the distribution must go directly from the IRA custodian to the charity, and the charity must be a 501(c)(3) organization.

Tax Planning Strategies for RMDs

Strategy 1: Pre-RMD Roth Conversions

The years between retirement and age 73 (or 75) are a golden window for Roth conversions. Your income is often lower (no salary, Social Security may not have started), so you can convert Traditional IRA balances to Roth at relatively low tax rates. Every dollar converted to Roth is one less dollar subject to future RMDs.

Example: A retiree in the 12% bracket converts $50,000 per year from ages 65-72, paying $6,000/year in taxes. They convert $400,000 total, reducing their future RMD base by $400,000. At age 80, their annual RMD is $19,800 less than it would have been — saving approximately $4,350/year in taxes at a 22% rate.

Strategy 2: Manage IRMAA Brackets

RMD income counts toward the Medicare Income-Related Monthly Adjustment Amount (IRMAA). In 2026, exceeding $109,000 (single) or $218,000 (MFJ) in MAGI triggers Part B premium surcharges ranging from $81.20 to $487.00 per month per person. Large RMDs can push retirees over these cliffs. Pre-RMD Roth conversions and QCDs can keep income below IRMAA thresholds. See our guide on healthcare costs in retirement for IRMAA bracket details.

Strategy 3: Time Your First RMD

As noted above, taking advantage of the April 1 grace period for your first RMD means two taxable distributions in one year. Model both scenarios with your tax preparer:

Scenario A: Take first RMD in the year you turn 73 → one RMD per year
Scenario B: Delay first RMD to April 1 → two RMDs in year 2, potentially higher bracket

For most retirees, Scenario A produces lower total taxes.

Strategy 4: Aggregate Strategically

If you have multiple IRAs with different investment profiles, take your RMD from the account with the least growth potential or the highest-cost investments. This keeps your best-performing assets compounding longer.

Common RMD Mistakes

1. Forgetting inherited accounts. If you inherited an IRA, it has its own RMD rules — separate from your own accounts. Missing an inherited account RMD triggers the same penalty.

2. Miscalculating the balance date. The balance used is always December 31 of the prior year. Do not use your current balance or a mid-year statement.

3. Assuming Roth IRAs are always exempt. Inherited Roth IRAs do require distributions under the 10-year rule for most non-spouse beneficiaries. Only your own Roth IRA is RMD-free.

4. Not withholding enough for taxes. RMD withdrawals are taxed as ordinary income. If you do not elect adequate withholding, you may owe a large tax bill (plus underpayment penalties) at filing time. Consider having 20-25% withheld from each RMD, or make quarterly estimated tax payments.

5. Missing the deadline. The annual deadline is December 31 — not April 15, not your birthday. Set calendar reminders in October to ensure you have time to process the distribution.

RMDs and Your Overall Retirement Plan

RMDs are not just a compliance exercise — they are a core piece of your retirement income strategy. Integrate RMD planning with:

Social Security timing: Delaying Social Security to 70 while doing Roth conversions in the gap years can dramatically reduce lifetime RMD-driven taxes
Tax bracket management: Know your bracket thresholds and plan withdrawals to stay within optimal ranges
Estate planning: Large pre-tax balances passed to heirs face the 10-year distribution rule and income taxes — converting to Roth reduces this burden

The IRS publishes the full Uniform Lifetime Table in Publication 590-B. Consult this document and a qualified tax professional to ensure your RMD calculations are accurate.

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