Required Minimum Distribution Rules

Required Minimum Distributions (RMDs) are the annual withdrawals the IRS forces you to take from tax-deferred retirement accounts — traditional IRAs, 401(k)s, 403(b)s, and most other employer plans — once you reach a certain age. The government let you defer taxes for decades while the money grew; RMDs are how it collects. SECURE 2.0 (2022) raised the RMD starting age to 73 for most people (and to 75 for those born in 1960 or later, starting in 2033). The penalty for missing an RMD is 25% of the amount you should have withdrawn — reduced to 10% if corrected within two years. For many retirees, RMDs create a tax-planning challenge: forced withdrawals push income up, potentially triggering Medicare IRMAA surcharges, making Social Security more taxable, and pushing you into higher brackets. Managing the timing and size of Roth conversions in the years before RMDs begin — when income is lower — is one of the most effective tax strategies available to pre-retirees in their 60s.

Required Minimum Distributions (RMDs) mandate annual withdrawals from tax-deferred retirement accounts starting at a specified age, ensuring deferred taxes are eventually collected.

Parameter	2026 Value

Legal Authority

26 U.S.C. § 401(a)(9) — Required minimum distributions
26 U.S.C. § 408 — Individual retirement accounts
26 U.S.C. § 408A — Roth IRAs
26 U.S.C. § 4974 — Excise tax on certain accumulations in qualified retirement plans
IRC Section 408(a)(6) — IRA distribution requirements
SECURE Act Section 114 — Increased RMD age to 72
SECURE 2.0 Section 107 — Increased to 73 (2023) and 75 (2033)
SECURE 2.0 Section 302 — Reduced penalty from 50% to 25%

How It Works

RMDs apply to all tax-deferred retirement accounts — traditional IRAs, SEP-IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, 457(b)s, and profit-sharing plans. Roth IRAs are exempt during the original owner's lifetime: you are never forced to take distributions from a Roth IRA you own. Starting in 2024, SECURE 2.0 also exempted Roth 401(k) accounts from RMDs during the owner's lifetime, aligning them with Roth IRAs. This makes Roth accounts not just tax-free in growth but free of the mandatory annual withdrawal schedule that characterizes traditional accounts.

The RMD amount is calculated each year by dividing the prior December 31 account balance by a life expectancy factor from the IRS Uniform Lifetime Table. At age 73, the factor is 26.5 — meaning you must withdraw approximately 3.77% of your balance. The factor decreases each year as life expectancy shortens, so the required percentage grows with age: at 80 the factor is 20.2 (~4.95%), at 85 it's 16.0 (~6.25%). If your sole beneficiary is a spouse more than 10 years younger than you, you may use the Joint Life and Last Survivor Table instead, which produces a smaller RMD by extending the calculation over a longer joint life expectancy.

The still-working exception lets you delay RMDs from a current employer's 401(k) plan if you're still employed there and own less than 5% of the company. This applies only to the current plan — not IRAs (which must begin RMDs at 73 regardless of employment status) and not prior employer plans you haven't rolled over. Many workers approaching 73 don't realize their old 401(k)s from previous employers are already subject to RMDs even if they're still working.

A timing trap catches many first-time RMD takers: the April 1 extension for the first RMD lets you delay your initial distribution until April 1 of the year after you turn 73. But the second year's RMD is still due December 31 of that same calendar year — so taking the extension results in two RMDs hitting your tax return in the same year. That concentration can push you into a higher bracket, trigger IRMAA Medicare surcharges, and make more of your Social Security taxable. For most retirees, taking the first RMD before December 31 of the year they turn 73 costs nothing extra and avoids the double-up.

IRA aggregation rules create flexibility that 401(k) holders don't have. With multiple IRAs, you calculate the RMD for each account separately, then can satisfy the combined total by taking any amount from any combination of the accounts. 401(k) RMDs must be calculated and satisfied separately from each individual plan — they cannot be aggregated with each other or with IRA RMDs. For beneficiaries inheriting accounts, most non-spouse beneficiaries must empty inherited accounts within 10 years under the SECURE Act — with annual distribution requirements during that period if the original owner had already started RMDs. See Inherited IRA Rules for the complete framework.

How It Affects You

If you're approaching age 73 and starting to think about RMDs from traditional IRAs or 401(k)s: The most important planning window is your 60s, before RMDs begin. Once RMDs start, you're forced to take taxable distributions every year at the IRS's schedule — and those distributions compound on top of Social Security, pension income, and any other retirement income, often pushing retirees into higher brackets than expected. A concrete example: a 73-year-old with a $1.5 million IRA must take approximately $56,600 in RMDs (dividing by the 26.5 Uniform Lifetime Table factor). If that's added to $35,000 in Social Security and a $25,000 pension, combined income hits $116,600 — potentially triggering IRMAA Medicare surcharges ($69.90–$419.30/month extra on top of the standard Part B premium, 2026 rates), making up to 85% of Social Security taxable, and pushing ordinary income into the 22% or 24% bracket. Roth conversions during your 60s — converting traditional IRA funds to Roth while in lower brackets — reduce the future RMD-taxable balance. The optimal conversion amount each year: fill up the 12% or 22% bracket without crossing into the next bracket or triggering IRMAA. A financial planner with Roth conversion modeling capability is worth consulting before age 70.

If you're charitably inclined and subject to RMDs: The Qualified Charitable Distribution (QCD) — see also the broader charitable contribution deduction — is one of the most tax-efficient moves available. A QCD allows you to transfer up to $105,000/year (2026, indexed to inflation going forward) directly from your IRA to a qualifying public charity — it counts as satisfying your RMD but is excluded from your adjusted gross income entirely. Compare to the alternative: taking the RMD as taxable income ($56,600 in our example above) and then donating to charity — but only if you itemize deductions (which only ~10% of taxpayers do after the TCJA doubled the standard deduction). With a QCD, the income never appears on your return at all, keeping your AGI lower and avoiding the IRMAA cliff, Social Security tax cliff, and bracket impacts. Requirements: you must be at least 70½ (not 73) to use QCDs; the transfer must go directly from your IRA custodian to the charity (not through you); and the charity must be a qualifying public charity (not a donor-advised fund or private foundation). For charitably inclined retirees who take the standard deduction, QCDs deliver the full tax benefit that an itemized charitable deduction would otherwise provide.

If you have multiple IRAs, 401(k)s, or other retirement accounts: The aggregation rules create both flexibility and complexity. For IRAs (traditional, SEP, SIMPLE): you must calculate a separate RMD for each IRA, but you can aggregate and take the total from any one or combination of IRAs you choose — useful if some accounts have appreciated assets you want to preserve. For 401(k)s: each plan is separate; you cannot aggregate 401(k) RMDs the way you can IRA RMDs — each must be satisfied from that specific plan. Roth 401(k)s are now RMD-exempt during the owner's lifetime (starting 2024 under SECURE 2.0), aligning them with Roth IRAs — if your workplace plan offers Roth contributions, this is an additional reason to use them. If you're still working at age 73 and don't own 5%+ of the company, you can defer RMDs from that employer's current plan — but not from IRAs or prior employer plans. Many people approaching RMD age benefit from consolidating scattered IRAs into one or two accounts for administrative simplicity, but check for any IRA accounts with unique features (older annuity contracts, certain protections) before rolling over.

If you've inherited an IRA or are planning your estate with RMD rules in mind: The SECURE Act's 10-year rule changed inherited IRA planning fundamentally. Most non-spouse beneficiaries must empty an inherited account within 10 years — and the 2024 final IRS regulations clarified that if the original owner had already started RMDs, you must take annual distributions throughout the 10-year period (the "at least as rapidly" rule), not just empty the account by year 10. Failing to take required annual distributions triggers the 25% penalty (10% if corrected within 2 years). Exceptions: surviving spouses, minor children (until age 21), disabled or chronically ill beneficiaries, and beneficiaries not more than 10 years younger than the deceased can still "stretch" distributions. From an estate planning standpoint, Roth IRAs are significantly better inheritance vehicles than traditional IRAs: inherited Roth IRAs still face the 10-year rule, but distributions are tax-free to the beneficiary — no annual distribution problem, no taxable income piling up in high-earning children's returns. Converting traditional IRA funds to Roth before death is one of the most valuable estate planning moves for account holders who won't need the funds themselves.

State Variations

State treatment of RMDs follows the state's treatment of retirement income generally:

States with no income tax: No state impact
States that exclude retirement income (e.g., PA excludes all IRA distributions from state tax)
States with partial exclusions: Many states exclude a fixed dollar amount of retirement income ($20,000-$80,000 varies by state)
RMD timing and calculation are federal rules with no state variation

Implementing Regulations

26 CFR Part 1 — Income tax regulations (sections 1.401(a)(9)-0 through 1.401(a)(9)-9: required minimum distribution table of contents, general rules, defined contribution plan RMDs, defined benefit plan RMDs, designated beneficiary rules)

Pending Legislation

Further age increases: Some proposals would raise the RMD age beyond 75
QCD expansion: Proposals to increase the annual QCD limit or index it to inflation
Roth-only treatment: Proposals to eliminate the RMD exemption for large Roth balances

Recent Developments

SECURE 2.0 Act (December 2022) made sweeping RMD changes, now fully in effect: The landmark SECURE 2.0 Act changed RMD rules across the board. Starting age rose from 72 to 73 for those born 1951-1959, and will rise to 75 for those born 1960 or later (effective 2033). The penalty for missing an RMD dropped from 50% to 25% of the shortfall (10% if corrected within two years). Roth 401(k) accounts are now exempt from RMDs during the owner's lifetime (starting 2024), aligning them with Roth IRAs. These changes give account holders more time to do Roth conversions and tax bracket management before RMDs force taxable income.
Inherited IRA 10-year rule finalized regulations (2024): After years of confusion following the original SECURE Act (2019), IRS issued final regulations in 2024 clarifying that non-spouse beneficiaries who inherit from an account owner who had already started RMDs must take annual distributions during the 10-year period — not just empty the account by year 10. This "at least as rapidly" rule applies to children (after age 21), siblings, and other non-eligible designated beneficiaries. Failure to take annual distributions during the 10-year window triggers the 25% penalty.
QCD limit increased to $105,000/year (2024) and indexed going forward: Qualified Charitable Distributions allow account owners age 70½+ to transfer up to $105,000 directly from their IRA to charity, satisfying the RMD without increasing AGI. SECURE 2.0 indexed the QCD limit to inflation starting in 2024, so it will increase annually. For retirees who are charitably inclined and take the standard deduction, QCDs are one of the most tax-efficient giving strategies available — the income simply never shows up on your return.
Still-working exception is narrower than most people assume: Many workers nearing retirement believe they can delay all RMDs by continuing to work. The still-working exception only applies to the current employer's plan — NOT IRAs, which must start RMDs at 73 regardless of employment status. Workers with multiple prior employer plans who haven't rolled them into IRAs should audit which accounts are subject to RMDs versus which qualify for the working exception.
2025 reconciliation proposals to raise RMD age further did not advance: Several proposals in the 119th Congress would have raised the RMD age to 77 or eliminated RMDs entirely for accounts below a threshold. None advanced in the 2025 reconciliation process. The current age structure (73 for most, 75 for those born 1960+) is stable law as of early 2026.