Required minimum distributions, explained without the jargon

For decades the IRS let your traditional IRA and 401(k) grow without taking a cent. That was never a gift. It was a deferral, and required minimum distributions are how the bill finally arrives. Reach a certain age and the government wants a withdrawal every year, taxed as income, needed or not. The rules come wrapped in acronyms, but underneath they are simpler than they look. Here is how they work in 2026, with every number checked against IRS.gov.

Starting age

73 (75 if born in 1960 or later)

Missed RMD penalty

25% of the shortfall, 10% if fixed in time

2026 QCD limit

$111,000 per person

What required minimum distributions are

A required minimum distribution, or RMD, is the smallest amount you must withdraw each year from certain tax-deferred retirement accounts once you reach the starting age. You can always take more. You can’t take less without paying a penalty.

The withdrawal is generally taxed as ordinary income, the same as a paycheck, except for any part that came from after-tax contributions. You don’t have to spend it. You can move what’s left after tax into a savings or brokerage account and let it sit. You just can’t leave it inside the tax shelter.

Each year’s RMD is due by December 31. There is one exception, for your very first RMD, and that exception is where most of the trouble starts.

RMD age: 73 now, 75 later

The SECURE 2.0 Act, a 2022 retirement law, raised the starting age twice. Which age applies to you depends only on the year you were born.

The 1959 row needs a footnote. The law as written could be read to give people born that year two starting ages at once, the kind of drafting that sends accountants to the medicine cabinet. The IRS’s proposed regulations settle it at 73.

So the first people to start at 75 are those born in 1960, who turn 75 in 2035. If you were born in 1953, you turn 73 this year, and 2026 is your first RMD year.

One exception for people still on a payroll: your current employer’s 401(k) or 403(b) may let you wait until April 1 of the year after you retire, as long as you don’t own more than 5% of the company and the plan allows it. It does not apply to IRAs, or to plans from jobs you’ve already left.

Which accounts have RMDs, and which don’t

• RMDs apply to: traditional IRAs, SEP IRAs, SIMPLE IRAs, and workplace plans such as 401(k)s, 403(b)s and 457(b)s.
• No RMDs while you’re alive: Roth IRAs. The original owner has never had to take money out of one.
• Roth 401(k)s and Roth 403(b)s: no lifetime RMDs starting in 2024. Before that, oddly, they did have them, which is one reason people rolled Roth 401(k)s into Roth IRAs: to dodge the withdrawals. That move is now optional.

The Roth exemption ends with you. Heirs who inherit a Roth account do face distribution rules, though the withdrawals are generally tax-free.

The April 1 deadline and the double-RMD trap

For your first RMD only, the IRS gives you extra time: until April 1 of the year after you reach your starting age. Every RMD after that is due by December 31.

Here’s the trap. Say you turn 73 in 2026 and use the full grace period, taking your first RMD in March 2027. Your second RMD, the one for 2027, is still due by December 31, 2027. That’s two years of withdrawals on one tax return, which can push you into a higher bracket. It can also raise your Medicare premiums, since Social Security sets the income-related surcharges using your tax return from about two years earlier.

Waiting can make sense if your income will drop sharply the following year, for instance if you’re still drawing a salary for part of this one. For most people, taking the first RMD in the year you reach the age is the calmer choice.

How to calculate your RMD

The formula is one line of arithmetic:

Account balance on December 31 of last year ÷ your IRS distribution period = this year’s RMD.

The distribution period, a number based on life expectancy, comes from the Uniform Lifetime Table in IRS Publication 590-B. Use the age you will be on your birthday this year. Most people use this table. The exception: if your spouse is your only beneficiary and is more than 10 years younger than you, you use a joint table that produces a smaller RMD.

A worked example

Say you turn 75 in 2026, and your traditional IRA was worth $400,000 on December 31, 2025. The Uniform Lifetime Table factor for age 75 is 24.6.

$400,000 ÷ 24.6 = $16,260.16, due by December 31, 2026.

For comparison, the factor at 73 is 26.5, so the same balance at 73 would require $15,094.34. The factor shrinks every year, which means the share you must withdraw creeps up as you age.

Your custodian (the bank or brokerage holding the account) will usually calculate the figure for you. Check their math once anyway, particularly the balance date they used.

The penalty for missing an RMD

Miss all or part of an RMD and the IRS charges an excise tax of 25% of the amount you should have withdrawn and didn’t. Before SECURE 2.0 it was 50%, so by IRS standards this counts as mellowing.

Fix the mistake in time, generally within two years, and the rate drops to 10%. You report the shortfall on Form 5329. If the miss was a reasonable error and you’re taking steps to correct it, you can ask the IRS to waive the tax entirely by taking the missed withdrawal and attaching a letter of explanation to that form.

The government let your money grow untaxed for decades. RMDs are how it collects the rent.

Several accounts? The aggregation rules

You calculate an RMD separately for each account. What differs is where you’re allowed to take the money from.

• IRAs can be combined. Add up the RMDs for all your traditional, SEP and SIMPLE IRAs, then take the total from any one IRA or any mix of them.
• 403(b)s can be combined with each other, but not with IRAs.
• 401(k)s and 457(b)s cannot be combined. Each plan pays out its own RMD.
• Spouses can’t pool. Your RMD has to come from your accounts, not your spouse’s.

So three 401(k)s from three old jobs means three separate withdrawals and three chances to forget one. That’s an argument for rolling old workplace plans into a single IRA before your RMDs begin. It isn’t always the right move (some large employer plans offer unusually cheap funds), but it does make December simpler.

Qualified charitable distributions

If you give to charity anyway, this is the most useful rule in the whole business. A qualified charitable distribution, or QCD, is money sent directly from your IRA to an eligible charity. It counts toward your RMD, and it isn’t included in your taxable income.

• Age: 70½ or older on the day of the gift. That’s younger than the RMD age, so you can start giving this way a few years early.
• 2026 limit: $111,000 per person, up from $108,000 in 2025. The figure is indexed to inflation and changes each year. Married couples who each own an IRA can each give up to the limit.
• Direct payment only: the money must go from the IRA custodian to the charity. If it lands in your checking account first, it’s an ordinary taxable withdrawal.
• IRAs only: no QCDs from 401(k)s, or from a SEP or SIMPLE IRA your employer is still contributing to.

The catch: you can’t also deduct the gift. If you take the standard deduction, you lose nothing. One more tip on timing: the first dollars you withdraw in a year count toward your RMD, so if you want a QCD to cover it, do the QCD before any other withdrawals.

Inherited IRAs, in brief

If someone other than your spouse died in 2020 or later and left you an IRA, you generally must empty it by December 31 of the year containing the 10th anniversary of the death. If the original owner had already started RMDs, you must also take yearly withdrawals along the way; the IRS waived penalties for missing those through 2024 but enforces them from 2025 on. Surviving spouses, minor children, and heirs who are disabled, chronically ill or not more than 10 years younger than the owner have gentler options.

A simple yearly RMD routine

1. Find your start year in the table above, and mark it on a calendar you actually look at.
2. List every account that has RMDs, and note which ones can be combined.
3. Decide on QCDs before any money comes out, so the gift counts toward the RMD.
4. Automate it. Most custodians will schedule the withdrawal each year and withhold tax, so the RMD happens in, say, November even if nobody remembers.
5. Get a second opinion once. If you have large balances, an inherited account, or a Roth conversion in mind, an hour with a tax professional before your first RMD year is money well spent.

And if it’s October and you haven’t taken this year’s RMD, you still have until December 31. We’d call the custodian this week anyway. Late December is when everyone else remembers too.

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