Required Minimum Distributions (RMDs): Rules, Ages, and Strategies

The IRS gave you a tax deduction when you contributed to your Traditional IRA or 401(k). Now they want their money back. Required Minimum Distributions (RMDs) force you to start withdrawing — and paying taxes — whether you need the money or not.

Key Takeaways

• RMD Age: 73 for those born 1951-1959, 75 for those born 1960+.
• Penalty: 25% of the amount you fail to withdraw (10% if corrected within 2 years).
• Roth IRAs and Roth 401(k)s: NO RMDs during your lifetime (SECURE 2.0 eliminated Roth 401(k) RMDs starting 2024)
• Calculation: Prior year-end account balance ÷ IRS life expectancy factor.

What Are RMDs?

Required Minimum Distributions are the minimum amounts you must withdraw annually from tax-deferred retirement accounts once you reach a certain age. The IRS uses life expectancy tables to calculate the percentage of your account you must distribute each year.

The math is simple:

RMD = Account Balance (Dec 31 of prior year) ÷ Life Expectancy Factor

Example: You turn 73 in 2026. Your Traditional IRA had a balance of $500,000 on December 31, 2025. The IRS life expectancy factor for age 73 is 26.5. Your 2026 RMD is $500,000 ÷ 26.5 = $18,868.

RMD Age Timeline

SECURE 2.0 changed the RMD age based on your birth year:

Birth Year	RMD Age	First RMD Year
1950 or earlier	72	Already started
1951-1959	73	Year you turn 73
1960 or later	75	Year you turn 75 (2033+)

Your first RMD: You can delay your first RMD until April 1 of the year after you turn 73 (or 75). But if you do, you will take two RMDs in that second year (the delayed one and the current year’s). This can push you into a higher tax bracket.

Strategy: Unless you have a specific reason to delay (e.g., you retire mid-year and want lower income in your last working year), take your first RMD in the year you turn 73. Avoid the double distribution.

Which Accounts Require RMDs?

Accounts that require RMDs:

• Traditional IRAs
• SEP IRAs
• SIMPLE IRAs
• Traditional 401(k)s
• Roth 401(k)s were subject to RMDs before 2024, but SECURE 2.0 eliminated this requirement — Roth 401(k)s are now RMD-free like Roth IRAs
• 403(b) plans
• 457(b) plans
• Inherited IRAs (see below)

Accounts that do NOT require RMDs:

• Roth IRAs (during the owner’s lifetime)
• 401(k)s at your current employer (if you are still working and own less than 5% of the company)

RMD Calculation and Life Expectancy Tables

The IRS publishes life expectancy tables in Publication 590-B. Most people use the Uniform Lifetime Table. If your spouse is more than 10 years younger and is your sole beneficiary, use the Joint Life and Last Survivor Expectancy Table (it results in a smaller RMD).

2026 Uniform Lifetime Table (Sample Ages)

Age	Life Expectancy Factor	Age	Life Expectancy Factor
73	26.5	80	20.2
75	24.6	85	15.6
77	22.9	90	12.2

As you age, the divisor decreases, forcing you to withdraw a larger percentage each year.

Example: At age 80 with a $400,000 IRA, your RMD is $400,000 ÷ 20.2 = $19,802. At age 85 with the same balance, your RMD is $400,000 ÷ 15.6 = $25,641.

RMD Penalties (and How to Fix Mistakes)

Old rule (pre-SECURE 2.0): Miss an RMD, pay a 50% excise tax.

New rule (SECURE 2.0): The penalty is now 25% of the shortfall. If you correct the mistake within 2 years (take the missed RMD and file Form 5329), the penalty drops to 10%.

How to Correct a Missed RMD

1. Take the missed RMD as soon as you realize the mistake.
2. File Form 5329 with your tax return for the year you missed the RMD.
3. Request penalty relief by attaching a statement explaining reasonable cause (custodian error, illness, etc.).

The IRS often waives the penalty if you demonstrate good faith and promptly correct the error.

Strategies to Minimize RMD Tax Impact

1. Qualified Charitable Distributions (QCDs)

If you are 70½ or older, you can donate up to $105,000 (indexed) directly from your IRA to charity. The distribution counts toward your RMD but is excluded from your taxable income.

Why this matters: If you take the standard deduction ($15,400 single / $30,800 married for 2026), a regular charitable donation gives you zero tax benefit. A QCD gives you the benefit of itemizing without actually itemizing.

See our full guide: Qualified Charitable Distributions (QCDs).

2. Roth Conversions Before RMD Age

Convert portions of your Traditional IRA to a Roth IRA in your 60s or early 70s (before RMDs start). This reduces your future RMD and eliminates future tax on Roth growth.

Example: You are 68 with a $600,000 Traditional IRA. You convert $50,000/year for 5 years. By age 73, your Traditional IRA is $350,000 instead of $600,000. Your RMD is 40% smaller.

See: Roth Conversion Ladder and Traditional vs. Roth Math.

3. Consolidate IRAs (But Not 401(k)s)

You can aggregate your IRA RMDs. If you have 3 Traditional IRAs, calculate the RMD for each, add them up, and withdraw the total from any one (or split across all three).

You CANNOT do this with 401(k)s. Each 401(k) requires its own separate RMD.

Strategy: Roll old 401(k)s into a single IRA for easier RMD management.

4. Still Working? Delay 401(k) RMDs

If you are still working at age 73+ and you do not own more than 5% of the company, you can delay RMDs from your current employer’s 401(k) until you retire.

This does NOT apply to IRAs or old 401(k)s. Only your current employer’s plan qualifies.

5. Use an HSA as a Supplement

If you are still working and enrolled in a high-deductible health plan, an HSA lets you save tax-free for medical expenses in retirement. Unlike IRAs and 401(k)s, HSAs have no RMDs — ever. Funds grow tax-free and withdrawals for qualified medical expenses are never taxed. After 65, you can withdraw for any purpose (taxed as ordinary income, like a Traditional IRA, but with no penalty). See our HSA vs. FSA comparison for details.

6. Consider Tax Diversification

Having money in pre-tax, Roth, and taxable accounts gives you flexibility to manage your effective tax rate in retirement. Learn more in our tax diversification guide and tax-efficient retirement withdrawal strategy.

Inherited IRA RMD Rules

If you inherit an IRA, the rules depend on your relationship to the deceased and the year they died.

SECURE Act 10-Year Rule (2020+)

Most non-spouse beneficiaries must empty the inherited IRA within 10 years. There are no annual RMDs during those 10 years — just a deadline to distribute everything by the end of year 10.

Exceptions (eligible designated beneficiaries):

• Surviving spouses (can treat the IRA as their own)
• Minor children of the deceased (until age 21, then the 10-year rule applies)
• Disabled or chronically ill beneficiaries
• Beneficiaries less than 10 years younger than the deceased

These exceptions can stretch RMDs over their life expectancy.

If the Original Owner Died Before Their RMD Age

You have 10 years to distribute, with no annual RMDs required.

If the Original Owner Died After Their RMD Age

You must take annual RMDs during the 10-year period (proposed IRS regulations, not yet finalized as of 2026).

Confused? You are not alone. The IRS has issued conflicting guidance. For a deeper dive, see our inherited IRA rules guide. And if you are planning ahead for how to pass retirement assets to heirs, check our estate tax planning strategies and step-up in basis at death guides.

How sharper.tax Helps

sharper.tax analyzes your uploaded return and calculates your upcoming RMDs based on your retirement account balances. We identify opportunities to reduce RMDs through Roth conversions, QCDs, and strategic withdrawals. We also flag if you are at risk of the Social Security tax torpedo or Medicare IRMAA surcharges due to high RMDs. Sophisticated retirement tax planning used to require a high-end CPA — we make it available for free.

Sources

• IRS: Retirement Topics — Required Minimum Distributions (RMDs)
• IRS Publication 590-B: Distributions from Individual Retirement Arrangements
• IRS: SECURE 2.0 Act
• IRS Form 5329: Additional Taxes on Qualified Plans

The information above is educational and not tax advice.