RMD Rules Explained: Ages, Calculations, and Penalties

For most of your working life, the tax code encourages you to leave retirement money alone. Then, in your early 70s, it reverses course and requires you to take money out whether you need it or not. Those withdrawals are required minimum distributions, and the RMD rules determine when they start, how much you must take, and what it costs if you get it wrong. For someone with a seven-figure IRA, the first RMD alone can add tens of thousands of dollars of taxable income.

The rules have changed several times since 2019, and the starting age now depends on your birth year. Beneficiaries face a separate set of rules that were finalized only in 2024. This guide covers the current law as it stands in 2026: who must take RMDs, when the first one is due, how the calculation works, how the penalty is assessed and waived, and, most usefully, how to plan around RMDs in the years before they begin.

As always, this is education rather than individualized advice. The IRS publishes the authoritative details in Publication 590-B, and our retirement planning team can model the effect of RMDs on your specific income and tax picture.

Which Accounts Have RMDs

RMDs apply to traditional IRAs, SEP IRAs, SIMPLE IRAs, and pre-tax balances in 401(k), 403(b), 457(b), and other employer plans. They do not apply to Roth IRAs during the original owner's lifetime, and beginning with the 2024 tax year they no longer apply to Roth 401(k) or Roth 403(b) balances either. That change eliminated the old reason to roll a Roth 401(k) into a Roth IRA before 73.

Two details matter for people with several accounts. If you own multiple traditional IRAs, you calculate the RMD for each one but may take the total from any one or combination of them. The same aggregation applies among 403(b) accounts. Employer 401(k) plans do not aggregate: each plan's RMD must come from that plan. Consolidating old 401(k)s into a single IRA before 73 simplifies this considerably.

When RMDs Start Under Current RMD Rules

The required beginning age has moved twice. Under the law in effect for 2026:

• Born 1950 or earlier: you are already taking RMDs under the old age 70½ or 72 rules.
• Born 1951 through 1959: RMDs begin at 73.
• Born 1960 or later: RMDs begin at 75.

The first RMD deadline

Your first RMD is due by April 1 of the year after you reach the starting age. Every later RMD is due by December 31. If you delay the first one into the following year, you will take two RMDs in that year, which can push you into a higher bracket and raise your Medicare premiums two years later. Most people with meaningful balances are better off taking the first RMD in the year they reach the starting age rather than waiting.

The still-working exception

If you are still employed and do not own more than 5% of the company, you can delay RMDs from your current employer's 401(k) or 403(b) until April 1 of the year after you retire, provided the plan allows it. This exception applies only to the current employer's plan, never to IRAs or to old 401(k)s from previous jobs. Some workers over 73 roll old plans and IRAs into the current employer's plan to shelter them from RMDs while they keep working; check that your plan accepts roll-ins first.

How to Calculate Your RMD

The formula is the account balance on December 31 of the prior year divided by a life expectancy factor from the IRS tables. Most owners use the Uniform Lifetime Table. The IRS provides worksheets and the tables to walk through it.

A worked example

Suppose you turn 73 in 2026 and your traditional IRA was worth $1,500,000 on December 31, 2025. The Uniform Lifetime Table factor at 73 is 26.5. Your 2026 RMD is $1,500,000 divided by 26.5, or about $56,604. At 75 the factor is 24.6, at 80 it is 20.2, at 85 it is 16.0, and at 90 it is 12.2. Because the factor shrinks each year, the percentage of the account you must withdraw rises from roughly 3.8% at 73 to about 8.2% at 90, even if the balance is falling.

When your spouse is much younger

If your spouse is your sole primary beneficiary and is more than ten years younger than you, you may use the Joint Life and Last Survivor Expectancy Table instead. Its factors are larger, so the RMD is smaller. The beneficiary designation must be in place for the whole year, which is one more reason to review beneficiary forms regularly.

Custodians calculate, but you are responsible

Most custodians will calculate your RMD and can automate the distribution. They do not know about your other accounts, your annuities inside the IRA, or a beneficiary change made at another firm. The legal obligation is yours, so verify the figure each January, especially in the first year and in any year you moved money between custodians.

The RMD Penalty and How to Fix a Missed Distribution

If you take less than the required amount, the excise tax is 25% of the shortfall. If you correct the mistake within a two-year window by taking the missed amount and filing the appropriate form, the penalty drops to 10%. Before 2023 the penalty was 50%, which is why so much older material sounds more alarming.

The IRS can waive the penalty entirely for reasonable cause. The process is to withdraw the missed amount as soon as you discover it, file Form 5329 with the return for the year of the shortfall, and attach a brief letter explaining what happened and that you have corrected it. Common reasonable-cause situations include serious illness, a custodian error, or confusion following a death. Waivers are routinely granted when the taxpayer acts promptly.

Withholding is a separate question. Custodians default to 10% federal withholding on IRA distributions unless you choose otherwise. Many retirees elect higher withholding on a December RMD to cover estimated taxes on other income, because withholding is treated as paid evenly through the year.

RMD Rules for Inherited Accounts

Beneficiaries follow different rules, and the 2019 SECURE Act rewrote them. The IRS finalized the regulations in 2024, with full enforcement beginning in 2025.

Spouses

A surviving spouse has the most flexibility. The spouse can roll the account into their own IRA and treat it as their own, delaying RMDs until their own starting age. Or the spouse can keep it as an inherited IRA, which allows penalty-free withdrawals before 59½ and lets a spouse whose partner was younger delay RMDs until the deceased would have reached the starting age. The right choice depends on the surviving spouse's age and cash needs.

Most non-spouse beneficiaries

Adult children and most other individual beneficiaries must empty the account by the end of the tenth year after the owner's death. If the owner had already reached their required beginning date, the beneficiary must also take annual RMDs in years one through nine, based on the beneficiary's own life expectancy, and then withdraw whatever remains in year ten. If the owner died before the required beginning date, no annual RMDs apply, but the ten-year deadline still does. Spreading withdrawals across the decade usually produces a lower total tax than waiting for year ten.

Eligible designated beneficiaries

Minor children of the owner (until they reach 21), disabled or chronically ill individuals, and beneficiaries not more than ten years younger than the owner can still stretch distributions over their life expectancy. Trusts named as beneficiaries follow their own detailed rules, which is a reason to have an estate attorney review any trust that will receive retirement assets. Attend coordinates with outside estate planning attorneys on this; we do not draft the documents.

Planning Around RMDs Before They Begin

The most effective RMD planning happens between retirement and the starting age, when your taxable income is often at its lowest point in decades.

Roth conversions in the gap years

Converting traditional IRA dollars to Roth in your 60s shrinks the balance that RMDs are calculated on and moves growth into an account with no lifetime RMDs. The classic approach is to convert enough each year to fill a target bracket, often the 22% or 24% bracket, while watching the Medicare IRMAA thresholds. Our Roth conversion guide covers the mechanics and the trade-offs.

Qualified charitable distributions

Once you reach 70½, you can send money directly from your IRA to a qualified charity, up to an annual limit that the IRS now indexes for inflation. A QCD counts toward your RMD but is excluded from your income entirely, which is better than a deduction for most retirees because it also keeps income below IRMAA and Social Security taxation thresholds. Note that QCDs must come from an IRA, not a 401(k).

Sequence withdrawals with RMDs in mind

Retirees who draw from taxable accounts first, leaving IRAs untouched until 73 or 75, often face the largest RMDs and the worst tax outcome. Blending IRA withdrawals with taxable withdrawals in the early years can produce a lower lifetime tax bill and keep income below the Medicare surcharge thresholds. We explain the options in our article on retirement withdrawal order.

Common RMD Mistakes

Most RMD errors are administrative rather than strategic, and they are avoidable.

• Using the wrong starting age. Check your birth year, not a rule you remember from a parent.
• Taking a 401(k) RMD from an IRA. Employer plans must satisfy their own RMDs.
• Rolling over an RMD. The RMD must be taken before any rollover that year and cannot be rolled into another account.
• Forgetting the RMD from an inherited IRA, which has its own schedule regardless of your age.
• Waiting until late December, when a processing delay can push the distribution into January.

RMD rules are mechanical once you know your starting age, your table factor, and your deadlines. The bigger opportunity is the decade before RMDs begin, when conversions, charitable giving, and withdrawal sequencing can reduce what the rules eventually force out. If you would like help projecting your RMDs and the taxes they will generate, the retirement planning team at Attend Wealth can build that picture with you.

Tony Colunga · Founder, Attend Wealth

Tony leads Attend Wealth, a fee-based wealth management firm in Atlanta serving professionals, families, physicians, and business owners. Advisory services are held to a fiduciary standard. More about Attend