You spent decades building a tax-deferred retirement nest egg. Then at age 73, the IRS says: start taking money out — whether you want to or not. These mandatory annual withdrawals are called Required Minimum Distributions, or RMDs. Miss one and the penalty is 25% of the amount you should have taken. Here's everything you need to know before that clock starts ticking.
What Is an RMD?
A Required Minimum Distribution is the minimum amount the IRS forces you to withdraw from most tax-deferred retirement accounts each year after you reach a certain age. The logic: the government gave you a tax break when you contributed to these accounts. Eventually, it wants to tax that money. RMDs ensure that day comes while you're still alive.
The annual RMD amount isn't fixed — it's calculated based on your account balance and your life expectancy according to IRS actuarial tables. As you age, the required percentage goes up.
Which Accounts Require RMDs?
| Account Type | RMDs Required? | Notes |
|---|---|---|
| Traditional IRA | Yes | Starting at age 73 |
| Rollover IRA | Yes | Same rules as traditional IRA |
| 401(k), 403(b), 457(b) | Yes | Exception if still working for that employer |
| SEP-IRA | Yes | Starting at age 73 |
| SIMPLE IRA | Yes | Starting at age 73 |
| Roth IRA | No | No RMDs during owner's lifetime |
| Roth 401(k) | No (after 2024) | SECURE 2.0 eliminated Roth 401k RMDs |
| Inherited accounts | Yes (different rules) | See Inherited IRA rules |
When Do RMDs Start? The Age 73 Rule
The SECURE 2.0 Act (signed in 2022) pushed the RMD starting age from 72 to 73 for anyone born in 1951 or later. It will increase again to 75 starting in 2033 for anyone born in 1960 or later.
Your first RMD must be taken by April 1 of the year after you turn 73. Every subsequent RMD is due by December 31 of each year.
One trap: if you delay your first RMD to April 1 (which you're allowed to do), you'll have two RMDs in that calendar year — the delayed first one and the second one for that year. Both distributions get counted as taxable income, which can push you into a higher bracket and trigger Medicare surcharges. Most people take the first RMD by December 31 of the year they turn 73 to avoid this.
How Is Your RMD Calculated?
The formula is straightforward: RMD = Prior year-end account balance ÷ IRS life expectancy factor.
The life expectancy factor comes from the IRS's Uniform Lifetime Table. Here are sample factors and what they mean:
| Age | Life Expectancy Factor | % of Balance Required |
|---|---|---|
| 73 | 26.5 | 3.77% |
| 75 | 24.6 | 4.07% |
| 80 | 20.2 | 4.95% |
| 85 | 16.0 | 6.25% |
| 90 | 12.2 | 8.20% |
| 95 | 9.1 | 10.99% |
Example: If your IRA balance was $500,000 on December 31 and you're 75, your RMD is $500,000 ÷ 24.6 = $20,325. That amount gets added to your taxable income for the year.
If you have multiple IRAs, you calculate the RMD for each separately but can take the total from any combination of your IRAs. With 401(k)s from different employers, each plan calculates its own RMD and you must take it from that plan separately.
The Penalty for Missing an RMD
Miss your RMD and the IRS charges an excise tax of 25% on the amount you should have withdrawn. If your RMD was $20,000 and you took nothing, you owe $5,000 to the IRS on top of normal income taxes.
SECURE 2.0 reduced this from the previous 50% penalty and added a correction window. If you catch the mistake and take the missed RMD within two years, the penalty drops to 10%. You must file IRS Form 5329 to report and pay the excise tax.
The Still-Working Exception
If you're still actively working for the employer sponsoring your 401(k) and you haven't reached the 5% owner threshold, you can delay RMDs from that specific plan until you actually retire. This exception does not apply to IRAs or old 401(k)s from former employers.
RMDs and Taxes: Planning Around Them
RMDs are taxed as ordinary income. Large RMDs can push you into a higher bracket, trigger Medicare IRMAA surcharges (higher Part B and D premiums), and increase taxes on Social Security benefits. Smart planning strategies include:
- Roth conversions before age 73: Converting traditional IRA money to Roth in your 60s reduces the balance subject to RMDs, shrinking future mandatory withdrawals
- Qualified Charitable Distributions (QCDs): If you're charitable, you can donate up to $105,000 per year directly from an IRA to charity — it satisfies your RMD obligation but doesn't count as taxable income
- Delay Social Security: Taking Social Security at 70 instead of 62 isn't directly RMD-related, but coordinating both can help manage total taxable income in retirement
For deeper context on building toward retirement without overloading on pre-tax accounts, see how much you actually need to retire and consider the catch-up contribution options while you're still accumulating.
Frequently Asked Questions
At what age do required minimum distributions start in 2026?
RMDs begin at age 73 for anyone born between 1951 and 1959. If you were born in 1960 or later, the starting age increases to 75 (effective 2033). Your first RMD is due by April 1 of the year after you reach the applicable RMD age. All subsequent RMDs are due by December 31 each year.
Do Roth IRAs have required minimum distributions?
No. Roth IRAs are not subject to required minimum distributions during the original owner's lifetime. This is one of the key advantages of a Roth IRA — you can leave the money invested indefinitely without being forced to take withdrawals. Roth 401(k)s also no longer require RMDs thanks to SECURE 2.0 (effective 2024). However, inherited Roth IRAs do have withdrawal requirements for beneficiaries.
What is the penalty for missing a required minimum distribution?
The penalty for failing to take a required minimum distribution is 25% of the amount that should have been withdrawn. This was reduced from 50% by the SECURE 2.0 Act. If you correct the mistake within two years by taking the missed distribution, the penalty drops further to 10%. You must file IRS Form 5329 to report and pay the excise tax.
Related: Social Security timing strategy, retirement number calculator guide, catch-up contributions after 50.
