Required Minimum Distributions (RMDs): The Complete 2026 Rules, Calculations & Strategies

What Is an RMD and Why Does It Exist?

A Required Minimum Distribution (RMD) is the minimum amount the IRS requires you to withdraw annually from most retirement accounts starting at a specified age per IRS Pub. 590-B. You don't have a choice — if you don't withdraw it, penalties apply.

Why does the IRS require this? Because these accounts (401k, traditional IRA, etc.) received tax deductions when you contributed. The government deferred taxes with the expectation you'd eventually pay them. RMDs force that to happen and generate tax revenue.

RMD Starting Age: 73 (SECURE 2.0, 2026)

The Timeline Per SECURE 2.0 Changes

• Before SECURE 1.0 (2019): RMD started at age 70½
• SECURE 1.0 (2020-2022): RMD moved to age 72 per SECURE Act (H.R. 5504, 2019)
• SECURE 2.0 (2023+, including 2026): RMD moved to age 73 per SECURE 2.0 Act (H.R. 2617, 2022)
• Future transition: Age 75 begins in 2033 per phased increase in SECURE 2.0

If you turned 70½ before 2020, you may still need to take RMDs from certain accounts. Check with your plan administrator about grandfathered rules.

The First RMD

You have a grace period for your first RMD. You can take it by December 31 of the year you turn 73, OR by April 1 of the following year (the "required beginning date").

Which Accounts Have RMDs?

Accounts Subject to RMDs

• Traditional (non-Roth) IRA
• SEP IRA
• SIMPLE IRA
• 401(k)
• 403(b)
• 457(b) (governmental)
• Traditional (non-Roth) 401(k) and 403(b)

Accounts NOT Subject to RMDs (Major Exception)

• Roth IRA — NO RMDs during your lifetime (this is a HUGE advantage)
• Roth 401(k) — NO RMDs during your lifetime (new in SECURE 2.0)
• HSAs (Health Savings Accounts) — no RMDs at any age (triple tax advantage)
• Roth conversions you've already made — no additional RMD

Aggregate vs. Separate Accounts

If you have multiple IRAs (traditional, SEP, SIMPLE), you calculate the RMD for each, then add them together. You can take the total from any one account. Each 401(k) is separate — you must take RMD from each.

Example: You have a $300,000 traditional IRA and a $200,000 SEP IRA. Combined RMD is calculated on $500,000. You can withdraw the entire amount from the traditional IRA, leaving the SEP IRA untouched.

How to Calculate Your RMD

The Formula

IRA/401(k) Balance (Dec 31, Prior Year) ÷ Life Expectancy Factor = RMD

Step 1: Get Your Account Balance

Use the value of your account on December 31 of the prior year. Most custodians will provide this on your year-end statement. If you have multiple accounts, add them together (for IRAs only).

Step 2: Find Your Life Expectancy Factor

The IRS publishes the "Uniform Lifetime Table" that shows your life expectancy factor based on your age. You're considered one year older on your birthday, so use your age as of December 31 of the current year.

Step 3: Divide to Get Your RMD

Your custodian can calculate this for you — most now provide it automatically. But verify the calculation yourself using the table above.

Penalties for Missing RMDs (and How SECURE 2.0 Reduced Them)

The Penalty — Now Lower Than Before

If you don't withdraw your full RMD by December 31, the penalty is:

25% of the RMD amount not withdrawn

Example: Your RMD is $30,000, but you only withdraw $20,000. You missed $10,000. Penalty = 25% × $10,000 = $2,500.

Good News: Penalty Reduction

If you miss an RMD but correct it within two years, the penalty can be reduced to 10% instead of 25%. You must file Form 5329 with your tax return to claim the reduction.

Even Better: First-Time Waiver

If this is your first missed RMD and you have reasonable cause, you may be able to request a waiver of the penalty entirely. Contact the IRS directly.

Bottom line: Missing an RMD is expensive, but not catastrophic if you correct it promptly. Prevention is far better.

Strategies to Minimize RMD Tax Impact

Strategy 1: Roth Conversions Before 73

The 10-12 year window between retirement and RMD age is golden. You're in a lower tax bracket (no working income), so converting $50,000-$100,000/year from traditional IRA to Roth is relatively cheap.

Benefits: You reduce the balance generating future RMDs, and that converted money grows tax-free forever. Roth RMDs don't exist.

Strategy 2: Qualified Charitable Distributions (QCD)

If you're charitably inclined, direct a distribution from your IRA to a qualified charity starting at age 70½ per IRS Pub. 590-B guidance on QCDs. The distribution:

• Counts toward your RMD
• Doesn't increase your taxable income (if done properly)
• Maximum: $108,000/year per person for 2026 (inflation-indexed; $100,000 in prior years)

This is especially valuable if you don't itemize deductions, because you get the RMD satisfied without triggering taxable income.

Strategy 3: Aggregate IRA Strategy

If you have multiple IRAs (traditional, SEP, SIMPLE), you aggregate the RMD calculation but can take the distribution from just one account. This gives flexibility.

Example: You have a $300,000 traditional IRA earning little, and a $200,000 SEP IRA with employer contributions. Combined RMD = $23,000. You can take the full $23,000 from the traditional IRA and leave the SEP IRA growing.

Strategy 4: 401(k) Exception (Still Employed)

If you're still employed with the company sponsoring your 401(k) at age 73, you may be able to delay RMDs from that specific plan until you retire. This is called the "still-employed exception."

Note: This does NOT apply to IRAs, only to your current employer's 401(k). If you own more than 5% of the business, the exception doesn't apply.

Inherited IRA RMD Rules (SECURE 2.0)

If you inherit an IRA, RMD rules depend on your relationship to the original owner:

Spouse (Most Favorable)

You can roll the inherited IRA into your own IRA or treat it as your own. RMDs follow your age, not the original owner's.

Non-Spouse Beneficiary (10-Year Rule)

Under SECURE 2.0, if you're a non-spouse beneficiary (child, sibling, friend), you have 10 years to withdraw the entire inherited IRA. You must withdraw it all by December 31 of the 10th year following the original owner's death.

For 2026, the RMD rules are complex, and most non-spouse beneficiaries should consult a tax professional.

Designated Beneficiary (Surviving Spouse, Minor Child, Disabled, Chronically Ill)

If you fit these categories, more favorable rules apply, allowing RMDs over your own life expectancy.

RMD Checklist