Required Minimum Distributions (RMDs) Guide 2026: Age 73, Calculation, Penalty & Strategies

1. What Are Required Minimum Distributions?

Required Minimum Distributions (RMDs) are the minimum amounts the IRS requires you to withdraw annually from tax-deferred retirement accounts, beginning at a specified age. The policy rationale is straightforward: funds in Traditional IRAs and 401(k) plans received a tax deduction when contributed and have grown tax-deferred. The government eventually needs to collect income tax on those funds. RMDs enforce that by mandating annual taxable withdrawals during the account owner's lifetime.

The RMD rules are codified in Internal Revenue Code Section 401(a)(9), which applies to all tax-qualified retirement plans. The implementing regulations are in Treasury Regulation §1.401(a)(9). IRS Publication 590-B provides the practical guidance for IRA owners, including the life expectancy tables used to calculate annual distributions.

2. SECURE 2.0: Age Changes for RMDs

The RMD start age has changed three times since 2019 — a legislative trend toward allowing longer tax deferral. The complete history:

The transition has created three generations of retirees operating under different RMD start ages simultaneously — it is essential to know your own birth year to determine which rule applies. Source: SECURE Act of 2019 (P.L. 116-94, §114); SECURE 2.0 Act of 2022 (P.L. 117-328, §107).

3. Which Accounts Are Subject to RMDs?

4. How to Calculate Your RMD

Step-by-Step Example

If your sole IRA beneficiary is a spouse more than 10 years younger, you may use the IRS Joint Life and Last Survivor Table (Table II in IRS Publication 590-B) instead. This table produces lower factors (longer joint life expectancy), resulting in smaller required distributions.

The IRS updated the Uniform Lifetime Table effective January 1, 2022, reflecting increased U.S. life expectancy per the 2010 Census. The revised table produces factors approximately 1–2 years longer than the prior table — resulting in slightly smaller annual RMDs than required under the pre-2022 calculation. Source: IRS Final Regulation §1.401(a)(9)-9 (T.D. 9930, November 2020).

5. IRS Uniform Lifetime Table (Ages 72–92)

The following table shows the life expectancy factors from the IRS Uniform Lifetime Table (Table III, IRS Publication 590-B, updated 2022). These factors apply when your spouse is not more than 10 years younger.

★ = Standard RMD start age (born 1951–1959). Source: IRS Publication 590-B (2024), Appendix B, Table III.

6. First RMD Deadline: April 1 vs. December 31

For your very first RMD, you have an option: take it by December 31 of the year you turn 73, or delay it until April 1 of the following year. This is a one-time choice — subsequent annual RMDs are always due by December 31.

7. IRA vs. 401(k) Aggregation Rules

A critical mechanical point: Traditional IRA RMDs and 401(k) RMDs are calculated and distributed separately. They cannot be combined.

8. Penalty for Missing an RMD

Failing to take the full RMD by the deadline triggers an excise tax on the shortfall (the amount not withdrawn). SECURE 2.0 reduced this penalty substantially.

How to Report and Correct a Missed RMD

1. Take the missed distribution as soon as possible (in the current tax year if the error was in a prior year).
2. File IRS Form 5329 (Additional Taxes on Qualified Plans) with your tax return for the year the RMD was missed.
3. On Form 5329, you may request a penalty waiver by attaching a letter explaining the reasonable cause and showing that the error has been corrected.
4. The IRS historically waives first-time RMD failures when corrected promptly with a reasonable cause letter — this is a discretionary waiver, not automatic.

9. Qualified Charitable Distributions (QCDs)

A Qualified Charitable Distribution is one of the most powerful tax strategies available to IRA owners aged 70½ or older. A QCD is a direct transfer from a Traditional IRA to a qualifying 501(c)(3) charity — up to $108,000 per person per year in 2025 (indexed for inflation, increased by SECURE 2.0 from the original $100,000 cap).

QCD Tax Example

The QCD strategy saves taxes not just through the deduction value but by reducing AGI, which cascades to reduce the taxable fraction of Social Security benefits and can prevent crossing an IRMAA threshold. Source: IRC §408(d)(8); IRS Publication 590-B, "Qualified Charitable Distributions."

10. Roth Conversion to Reduce Future RMDs

The most powerful long-term strategy to reduce RMD burden is converting Traditional IRA assets to Roth IRA before age 73. Roth IRA balances are not subject to RMDs during the owner's lifetime — converting reduces the pre-tax IRA base that will eventually generate forced distributions.

RMD Reduction Through Conversion: Illustration

Illustrative projections only. Assumes 5% annual return; RMD factors from IRS Uniform Lifetime Table.

The optimal conversion strategy targets the years between retirement and age 73 — after earned income drops and before RMDs begin. Converting enough each year to fill the top of the 22% or 24% bracket progressively reduces the pre-tax IRA balance without excessive tax cost. Each dollar converted before 73 is one less dollar generating forced RMD income at potentially higher tax rates or IRMAA thresholds.

11. QLACs: Qualified Longevity Annuity Contracts

A Qualified Longevity Annuity Contract (QLAC) is a deferred income annuity purchased with IRA funds that allows you to defer RMDs on a portion of your IRA until as late as age 85. SECURE 2.0 increased the QLAC limit to $200,000 (up from the prior limit of 25% of IRA balance or $145,000, whichever was less).

A $200,000 QLAC set up at age 70 to begin payments at 85 can defer $200,000 of IRA balance from RMD calculation for 15 years — reducing annual RMDs during ages 73–84. The tradeoff: $200,000 is illiquid and committed to the annuity contract. If the owner dies before 85, some or all principal may be lost depending on the contract terms. Source: IRC §401(a)(9)(B)(iv); SECURE 2.0 Act §202; Treasury Reg. §1.401(a)(9)-6(T)(-17)(b)(1).

12. Still-Working Exception for 401(k) Plans

If you are still working at or after age 73 and participate in your current employer's 401(k) plan, you may delay RMDs from that specific 401(k) until April 1 of the year after you retire — as long as you do not own more than 5% of the company.

• The still-working exception applies only to the current employer's plan — not to IRAs or old employer 401(k)s.
• IRAs have no still-working exception — RMDs begin at 73 regardless of employment status.
• 5% owner rule: business owners with 5% or more ownership cannot use the still-working exception for that business's plan.
• An alternative: roll old employer 401(k) funds into the current employer's plan (if the plan accepts incoming rollovers) to bring those funds under the still-working exception umbrella.

13. Inherited IRA RMD Rules (SECURE Act 10-Year Rule)

The SECURE Act of 2019 replaced the prior "stretch IRA" strategy with a mandatory 10-year liquidation rule for most non-spouse beneficiaries inheriting IRAs from owners who died after December 31, 2019.

14. RMDs and Tax Impact: Social Security and IRMAA

RMDs create taxable income that can trigger two significant secondary tax effects — sometimes called the "invisible tax" of retirement income.

Effect on Social Security Taxation

Up to 85% of Social Security benefits become taxable when combined income (AGI + non-taxable interest + 50% of SS benefits) exceeds $34,000 (single) or $44,000 (MFJ). A large RMD can push combined income over these thresholds, making more Social Security taxable. This creates an effective marginal tax rate higher than your stated bracket — each additional $1 of RMD income can cause 85 cents of additional Social Security to be taxed, creating a compounding effect sometimes referred to as the "SS hump" in retirement tax planning.

Effect on Medicare IRMAA

Medicare Part B and Part D premiums are determined by your MAGI from two years prior. Large RMDs in 2025 affect 2027 Medicare premiums. Crossing an IRMAA threshold can add $200–$600+ per person per month to Medicare premiums. The IRMAA impact is often underestimated in retirement income planning — a single large RMD can create a two-year "IRMAA cliff" where premiums jump unexpectedly. Strategies: QCDs to reduce AGI from RMDs; Roth conversions before RMDs begin to reduce future RMD amounts; timing large medical deductions to offset RMD income in the same year.

15. Common Mistakes to Avoid

16. Glossary

Required Minimum Distribution (RMD)

IRS-mandated annual withdrawal from tax-deferred retirement accounts, beginning at the applicable start age, calculated using the prior year-end balance and IRS Uniform Lifetime Table.

Uniform Lifetime Table

IRS Table III (Publication 590-B) listing life expectancy factors by age, used to calculate annual RMDs for IRA owners — updated effective 2022 per the 2010 Census.

Qualified Charitable Distribution (QCD)

Direct transfer of up to $108,000/year (2025) from a Traditional IRA to a qualifying 501(c)(3) charity — counts toward RMD but excluded from taxable income. Available at age 70½+.

Correction Window

Two-year period following the year of a missed RMD during which the excise tax is reduced from 25% to 10% if the distribution is taken and IRS Form 5329 is filed.

QLAC

Qualified Longevity Annuity Contract — deferred income annuity purchased with up to $200,000 of IRA assets that defers RMDs on the invested amount until distributions begin (at latest age 85).

10-Year Rule

SECURE Act requirement for most non-spouse beneficiaries to empty an inherited IRA within 10 years of the original owner's death (for deaths after December 31, 2019).

Stretch IRA

Pre-SECURE Act strategy allowing non-spouse beneficiaries to take distributions from an inherited IRA over their own life expectancy — effectively eliminated by the SECURE Act for most beneficiaries.

IRMAA

Income-Related Monthly Adjustment Amount — Medicare Part B and D premium surcharge triggered by MAGI above certain thresholds; determined by MAGI from two years prior.

Still-Working Exception

Provision allowing employees still working at their current employer (non-5% owners) to delay 401(k) RMDs past age 73 until the April 1 following the year of retirement.

Joint Life and Last Survivor Table

IRS Table II — used instead of the Uniform Lifetime Table when your sole IRA beneficiary is a spouse more than 10 years younger; produces lower distribution factors and smaller RMDs.

17. Frequently Asked Questions

Authoritative Sources

• IRS Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs) — 2024 ↗
• IRS: Retirement Plan FAQs — Required Minimum Distributions (RMDs) ↗
• IRS: Uniform Lifetime Table (Table III) ↗
• SECURE 2.0 Act of 2022 (P.L. 117-328) — Congress.gov ↗
• IRS Notice 2024-35: Transition Relief for Inherited IRA RMDs ↗
• IRS Form 5329: Additional Taxes on Qualified Plans ↗
• CMS: 2025 Medicare Part B Premiums and IRMAA Tables ↗