What are Required Minimum Distributions (RMDs)?

A required minimum distribution (RMD) is the minimum amount you must withdraw each year from most tax-deferred retirement accounts once you reach a certain age. The rule exists because those accounts received a tax deduction going in and grew tax-deferred; RMDs are how the government eventually collects that deferred tax.

RMDs apply to traditional IRAs, SEP and SIMPLE IRAs, and employer plans such as 401(k)s, 403(b)s, and 457(b)s. They do not apply to Roth IRAs during the original owner’s lifetime, and as of 2024 they no longer apply to designated Roth accounts inside employer plans either.

What Age Do RMDs Start?

The starting age changed twice in recent years, first under the SECURE Act and again under SECURE 2.0, so the answer depends on your birth year:

Your first distribution is not due immediately at that birthday. You have until April 1 of the year following the year you reach your RMD age, a date known as your required beginning date. Every subsequent RMD is due by December 31.

Deferring that first one to April 1 means taking two distributions in the same calendar year, which can push you into a higher bracket. Taking the first RMD in the year you reach the applicable age avoids that doubling.

The still-working exception. If you are still employed past your RMD age and do not own more than 5% of the company, you can generally delay RMDs from that employer’s plan until you retire. This does not apply to IRAs or to plans from previous employers.

How to Calculate Your RMD

Divide the account balance as of December 31 of the prior year by a life expectancy factor from the IRS tables:

RMD = Prior Year-End Balance / Life Expectancy Factor

The Uniform Lifetime Table applies unless your sole beneficiary is a spouse more than 10 years younger than you, in which case the Joint Life and Last Survivor Table applies instead and produces a smaller required withdrawal.

Take someone born in 1951 who turns 75 in 2026 and had $500,000 in a traditional IRA on December 31, 2025.

1. Find the prior year-end balance. $500,000, from the December 31, 2025 statement.
2. Find the factor for the age you reach this year. The Uniform Lifetime factor for age 75 is 24.6.
3. Divide. $500,000 / 24.6 = $20,325, which must come out by December 31, 2026.

If the account grows to $510,000 by the end of 2026, the 2027 RMD at age 76 is $510,000 / 23.7 = $21,519. The factor shrinks each year, so the percentage you must withdraw rises steadily with age.

Whether you can take the combined total from one account depends on the account type.

• IRAs can be aggregated. Calculate the RMD for each traditional IRA, then withdraw the total from any one or any combination of them.
• 403(b)s can be aggregated with each other. Total the required amounts across your 403(b) contracts and take the sum from whichever you choose.
• 401(k)s and other qualified plans cannot. Each plan requires its own separate distribution, calculated and taken individually.

RMD Table for 2026 (Uniform Lifetime Table)

These factors have been in effect since 2022 and apply for 2026. Unlike contribution limits, the table is not adjusted annually, so a table labeled for an earlier year is still current unless the IRS reissues it.

The percentage column is the reciprocal of the factor and is what makes the trajectory visible: a little over 4% at 75, past 6% at 85, and above 8% from 90 onward. That climb is why RMDs can push retirees into higher brackets in later years than they occupied at the start of retirement.

Inherited IRA RMD Rules

Inherited accounts follow a separate set of rules. For owners who died after 2019, the schedule depends on what kind of beneficiary you are and whether the owner had already started RMDs.

Eligible designated beneficiaries can still take distributions over their life expectancy instead of emptying the account within 10 years. That group is limited to:

• The owner’s surviving spouse
• The owner’s child under 21 (the 10-year rule starts once the child turns 21)
• A disabled or chronically ill beneficiary
• A beneficiary not more than 10 years younger than the owner

Other designated beneficiaries, such as adult children and grandchildren, fall under the 10-year rule: the inherited account must be fully emptied by December 31 of the tenth year after the year of death.

Whether you also owe annual RMDs during those 10 years depends on when the owner died. Under final IRS regulations published in July 2024 and effective for 2025, if the owner died on or after their required beginning date, you must take annual RMDs in years one through nine and empty the account by the end of year 10. If the owner died before that date, no annual distributions are required; only the year-10 deadline applies. The IRS waived penalties for missed annual distributions of this kind for 2021 through 2024, so 2025 was the first year they applied.

Roth IRA owners are treated as dying before their required beginning date, so an inherited Roth IRA under the 10-year rule has no annual RMDs, only the year-10 deadline.

The Penalty for Missing an RMD

Failing to take a full RMD triggers an excise tax on the shortfall. SECURE 2.0 reduced this penalty substantially:

• 25% of the amount not withdrawn.
• 10% if you correct the shortfall within the correction window, generally two years, and file the appropriate form.

The previous penalty was 50%, a figure that still circulates widely in older material. If you miss an RMD, the IRS may also waive the penalty entirely for reasonable cause when you correct the error and request relief on Form 5329.

Planning Around RMDs

RMDs are taxable as ordinary income, and because the required percentage climbs with age, they can push retirees into higher brackets later in retirement than they occupied earlier. They can also raise Medicare premiums through income-related monthly adjustment amounts (IRMAA) and increase the share of Social Security benefits subject to tax.

Roth conversions in the window between retiring and your required beginning date are one way to shrink future RMDs. Converting traditional balances during those lower-income years reduces the base that future RMDs are calculated from, at the cost of paying tax on the converted amount now. Simply spending from traditional accounts early, rather than preserving them and letting them compound, accomplishes a smaller version of the same thing.

Charitably inclined retirees have a second option. From age 70 1/2 you can send IRA distributions directly to qualified charities as a qualified charitable distribution (QCD), up to an annual limit indexed for inflation. The QCD counts toward your RMD but never appears in your adjusted gross income, which is more favorable than taking the distribution and claiming a deduction for the gift.

Sizing these decisions means weighing how a conversion this year affects brackets, Medicare surcharges, and RMDs a decade out. When you run a Roth conversion search in ProjectionLab, you can set lower RMDs or reduced IRMAA surcharges as the objective.

Frequently Asked Questions

What age do RMDs start? Age 73 if you were born between 1951 and 1959, and 75 if you were born in 1960 or later. Your first distribution is due by April 1 of the following year.

What is the penalty for missing an RMD? A 25% excise tax on the amount you failed to withdraw, reduced to 10% if corrected within the correction window. The IRS may waive it for reasonable cause if you correct the shortfall and file Form 5329.

Do Roth accounts have RMDs? Roth IRAs have no RMDs during the original owner’s lifetime. Designated Roth accounts in 401(k) and 403(b) plans were subject to RMDs until 2024, when SECURE 2.0 eliminated that requirement. Inherited Roth accounts do carry distribution requirements for beneficiaries.

Can I take my RMD from just one account? For IRAs, yes. Total the required amounts across your traditional IRAs and withdraw the sum from whichever you choose. Employer plans each require their own distribution.

Do you have to take RMDs from an inherited IRA? Yes. Under the 10-year rule, you must empty the account by the end of the tenth year after the owner’s death, and if the owner had already reached their required beginning date, you also take annual RMDs in years one through nine. Eligible designated beneficiaries, such as a surviving spouse, can instead take annual distributions over their life expectancy.

Can I reinvest my RMD? You cannot roll it back into a tax-deferred account, but nothing prevents you from investing the after-tax proceeds in a taxable brokerage account. If you have earned income, you may also be eligible to contribute to an IRA separately.

How can I reduce future RMDs?Roth conversions in lower-income years before your required beginning date, qualified charitable distributions from 70 1/2, and drawing down traditional balances earlier in retirement are the primary approaches.