Required Minimum Distributions (RMDs)

When RMDs start

• Age 73: for those born 1951-1959 (current law per SECURE 2.0)
• Age 75: for those born 1960 or later (starting in 2033)
• First RMD deadline: April 1 of year AFTER the year you turn 73 (giving extra time on first one)
• Subsequent RMDs: December 31 of each year

If you delay the first RMD to the April 1 deadline, you must take TWO RMDs that year — both could push you into a higher tax bracket.

How to calculate your RMD

RMD = Account balance (Dec 31 prior year) ÷ Distribution period from IRS Uniform Lifetime Table

Example: $500,000 IRA balance at end of prior year, age 75. RMD = $500,000 / 24.6 = $20,325. Must withdraw at least this amount by Dec 31.

What accounts require RMDs

• Traditional IRA — yes
• SEP IRA, SIMPLE IRA — yes
• Traditional 401k, 403b, 457b — yes
• Roth 401k — yes (changes in SECURE 2.0; no longer requires RMDs in 2024+)
• Roth IRA — NO RMDs during owner's lifetime (one of Roth's biggest advantages)
• Inherited IRA — yes, with different rules (10-year rule for non-spouse beneficiaries)

The 25% missed-RMD penalty

If you miss your RMD, the IRS imposes a 25% excise tax on the SHORTFALL (not the entire account):

• Penalty was 50% until SECURE 2.0 reduced it to 25% in 2023
• Reduces to 10% if you correct within 2 years
• Can be waived if you can show reasonable cause and file Form 5329

If you discover a missed RMD, take the distribution immediately and file Form 5329 with explanation.

Qualified Charitable Distributions (QCDs)

If you're 70½ or older AND charitably inclined, QCDs are one of the most tax-efficient strategies:

• Direct transfer up to $108,000 (2026) from IRA to qualified charity
• Counts toward your RMD
• Excluded from taxable income (vs. taking RMD as income then donating which only helps if you itemize)
• Reduces AGI, which helps with Medicare premium brackets, Social Security taxation, and other AGI-dependent calculations

Available even if you don't itemize — major advantage post-2017 tax law that doubled standard deduction.

Strategic RMD reduction tactics

1. Roth conversions before age 73: Convert Traditional IRA balances to Roth in years before RMD starts. Pay tax now at potentially lower rate, eliminate future RMDs.
2. QCDs as RMD substitute: If you donate to charity anyway, route through QCD instead of RMD-then-donate.
3. QLAC (Qualified Longevity Annuity Contract): Allocate up to $200,000 to QLAC; that portion is exempt from RMDs until annuity payments start (up to age 85).
4. Working past 73 (for 401k only): If still working at your employer at 73+, you can defer RMDs from THAT employer's 401k until you separate. Doesn't apply to IRAs.
5. Roth 401k rollover to Roth IRA: Roth 401k now requires RMDs (changed by SECURE 2.0 — wait, actually SECURE 2.0 ELIMINATED Roth 401k RMDs starting 2024). So Roth 401k now has no RMDs either, like Roth IRA.

Frequently Asked Questions

What's the deadline for taking my RMD?

December 31 of the calendar year. EXCEPTION: your FIRST RMD can be delayed until April 1 of the year after you turn 73 (but you'd then take 2 RMDs that year).

How is RMD calculated for inherited IRAs?

Different rules. Spouse inheriting can roll into own IRA and use normal rules. Non-spouse inheriting (post-2019) generally must withdraw entire balance within 10 years (10-year rule), with annual RMDs in years 1-9 if original owner was already taking RMDs.

Can I take more than my RMD?

Yes. RMD is the MINIMUM. You can withdraw more anytime, but excess withdrawals don't count toward future-year RMDs.

What if I have multiple IRAs?

Calculate RMD for each IRA separately, but you can take the TOTAL combined RMD from any single IRA (or any combination). Different rule for 401ks: each 401k's RMD must come from that specific 401k.

Are RMDs taxed?

Yes — as ordinary income. They're a major reason retirees can end up in higher tax brackets than during working years (combined with Social Security and pension income).