The Complete Guide to Required Minimum Distributions (RMDs)

What Are Required Minimum Distributions?

A required minimum distribution (RMD) is the minimum amount you must withdraw each year from certain tax-advantaged retirement accounts once you reach a specific age. The government created RMDs to ensure that tax-deferred retirement accounts are eventually withdrawn and taxed — they can't remain tax-deferred forever. RMDs apply to traditional IRAs, 401(k)s, 403(b)s, and other pre-tax retirement accounts, but not to Roth IRAs during the owner's lifetime.

The logic is straightforward: you received a tax deduction when you contributed to these accounts, and the growth was tax-deferred. The government deferred its tax revenue, expecting to collect it when you withdraw in retirement. RMDs ensure that withdrawal (and taxation) actually happens, rather than the money remaining tax-deferred indefinitely or passing to heirs with the tax never paid.

RMDs matter because they force withdrawals — and taxation — whether you need the money or not. A retiree with a large traditional IRA may be forced to withdraw more than they want to spend, pushing them into a higher tax bracket and increasing their tax bill. Managing RMDs — through timing, account type, and proactive planning — is an important part of retirement tax strategy. This guide covers when RMDs begin, how they're calculated, the penalty for missing them, which accounts have them, and strategies to minimize their tax impact.

When Do RMDs Begin?

The age at which RMDs begin has shifted over time, and it's essential to know the current rules (which can change with legislation).

Current rules (as of recent legislation): RMDs generally begin at age 73 for those born in 1951 or later (previously 70½, then 72, now 73, with a further increase to 75 scheduled for those born in 1960 or later). The exact age depends on your birth year and current law, so verify the rule for your situation each year. The first RMD can be delayed slightly (until April 1 of the following year), but subsequent RMDs must be taken by December 31 each year.

The first RMD timing: your first RMD is due by April 1 of the year after you reach the RMD age. If you turn 73 in 2026, your first RMD is due by April 1, 2027. However, delaying the first RMD to April 1 means you'll take two RMDs that year (the delayed first one plus the current year's by December 31), which can push you into a higher tax bracket. Often it's better to take the first RMD in the year you turn 73 rather than delaying, unless delaying provides a tax benefit.

Subsequent RMDs: after the first, each year's RMD is due by December 31. Missing the deadline triggers the penalty (below).

Still-working exception: if you're still employed and participating in your employer's 401(k) or similar plan, you may be able to delay RMDs from that plan until you retire (if the plan allows and you don't own more than 5% of the business). This exception applies only to the current employer's plan, not to IRAs or former employers' plans. It can be valuable for those who work past RMD age.

Inherited accounts: beneficiaries of inherited accounts generally have their own RMD rules (often requiring distribution within 10 years under current law), which differ from the original owner's rules. See our estate planning guide.

Because RMD ages have changed with legislation and may change again, verify the current rule for your birth year each year. The IRS publishes the rules; your account custodian should also notify you.

How RMDs Are Calculated

An RMD is calculated by dividing your account balance at the end of the previous year by a life expectancy factor from an IRS table.

The formula: RMD = account balance (Dec 31 of previous year) ÷ life expectancy factor.

The life expectancy factor comes from IRS tables (the Uniform Lifetime Table for most owners, or the Joint Life and Last Survivor Expectancy Table if your spouse is the sole beneficiary and more than 10 years younger). The factor decreases each year as your life expectancy shortens, meaning RMDs increase as a percentage of your balance over time. For example, the factor at age 73 might be around 26.5, giving an RMD of about 3.8% of your balance; at 85, the factor is smaller, giving a larger percentage.

A worked example: your traditional IRA balance was $500,000 on December 31 of last year. Your life expectancy factor is 26.5. Your RMD is $500,000 ÷ 26.5 = about $18,868. You must withdraw at least that amount during the year.

Multiple accounts: for IRAs, you calculate the RMD for each IRA separately, but you can take the total IRA RMD from any one or a combination of your IRAs. For 401(k)s and other employer plans, you calculate and take the RMD separately from each plan. This distinction matters for planning — you can aggregate IRA RMDs but not 401(k) RMDs.

The custodian calculates it: your account custodian (brokerage or plan administrator) typically calculates your RMD and notifies you, but you're responsible for ensuring it's taken. Don't rely solely on the custodian — verify the calculation and the withdrawal.

Taxes on RMDs: RMDs are taxed as ordinary income in the year withdrawn (because the contributions were pre-tax and growth was tax-deferred). The withdrawal adds to your taxable income, potentially pushing you into a higher bracket, increasing taxes on Social Security, and increasing Medicare premiums (which are income-based). This is why managing RMDs is a tax-planning priority.

The Penalty for Missing an RMD

Missing an RMD or taking less than required carries a significant penalty — historically 50% of the amount not withdrawn (the "excess accumulation penalty"). Recent legislation reduced it to 25%, and further to 10% if corrected timely. The penalty is on top of the ordinary income tax you still owe on the withdrawal.

Example: your RMD was $20,000 and you took nothing. The penalty could be 25% of $20,000 = $5,000, plus you still owe income tax on the $20,000. That's a costly mistake.

How to correct a missed RMD: if you miss an RMD, take it as soon as you realize the error, file IRS Form 5329 to report the missed RMD and request a penalty waiver (the IRS may waive the penalty for reasonable cause, especially if corrected promptly), and pay any tax owed. Prompt correction and a reasonable-cause waiver request often reduce or eliminate the penalty, but don't count on it — take RMDs on time.

Avoiding the penalty: the simplest approach is to set up automatic RMD withdrawals with your custodian, so the required amount is distributed each year without your having to remember. Many custodians offer this; take advantage of it. Calendar reminders are a backup.

The penalty is severe enough that missing an RMD is one of the most expensive retirement mistakes you can make. Take them on time, every time.

Which Accounts Have RMDs?

RMD rules differ by account type, and knowing which accounts have them is essential.

Accounts with RMDs (pre-tax):

• Traditional IRAs
• SEP IRAs and SIMPLE IRAs
• 401(k), 403(b), and 457(b) plans (for the pre-tax portion)
• Inherited traditional IRAs and inherited Roth IRAs (beneficiary rules apply)

Accounts without RMDs (during owner's lifetime):

• Roth IRAs — no RMDs during the owner's lifetime (the original owner is never forced to withdraw). This is a significant advantage of Roth IRAs for those who don't need the funds. (Inherited Roth IRAs do have beneficiary RMD rules.)
• Roth 401(k) — originally subject to RMDs, but recent legislation eliminated RMDs for Roth 401(k)s during the owner's lifetime, making them similar to Roth IRAs in this respect. However, rolling a Roth 401(k) to a Roth IRA can simplify and ensure no RMDs.

The still-working exception: for your current employer's 401(k) or similar plan, you may delay RMDs from that plan until retirement (if the plan allows and you're under 5% ownership). This doesn't apply to IRAs or former employers' plans.

Understanding which accounts have RMDs lets you plan your withdrawal order and account structure to minimize taxes. The Roth IRA's lack of RMDs is a key reason it's valuable for those who won't need the funds in early retirement. See our Roth IRA guide and 401(k) and IRA guide.

Strategies to Minimize the Tax Bite

RMDs force taxable withdrawals, but several strategies reduce their impact.

Start withdrawals before RMD age (if beneficial). If taking withdrawals before RMD age keeps you in a lower tax bracket (e.g., in early retirement before Social Security and RMDs begin), voluntary withdrawals can "fill up" lower brackets and reduce the balance subject to later, larger RMDs. This is especially valuable in the years between retirement and RMD age, when your taxable income may be lower.

Roth conversions. Converting traditional IRA funds to a Roth IRA before RMD age (and before Social Security begins) can reduce the future RMD burden by moving money from a pre-tax account (with RMDs) to a tax-free account (without RMDs). You pay tax on the conversion, but if done in a low-bracket year, the tax cost may be lower than future RMD taxation. This is a powerful strategy for those with large traditional balances and years of lower income before RMDs and Social Security. See our Roth IRA guide.

Qualified charitable distributions (QCDs). If you're at least 70½, you can direct up to $108,000/year (2025 figure, indexed) from your IRA directly to a qualified charity. The QCD counts toward your RMD and is excluded from your taxable income — a powerful way to satisfy the RMD while reducing taxes, especially for charitably inclined retirees. This is often better than taking the RMD and then donating, because the QCD avoids the income inclusion entirely.

Delay Social Security to reduce RMD impact. Delaying Social Security to 70 increases your benefit and reduces your income in the years before claiming, potentially creating room for Roth conversions or voluntary withdrawals at lower tax rates. Coordinating Social Security timing with RMDs and conversions is a key retirement tax strategy. See our Social Security calculator.

Manage your bracket. RMDs can push you into a higher bracket, increase taxes on Social Security, and raise Medicare premiums (which are income-based via IRMAA). Plan withdrawals and conversions to manage your taxable income across years, smoothing the tax burden rather than spiking in RMD years.

Consolidate accounts. Having multiple IRAs complicates RMD tracking. Consolidating IRAs (where sensible) simplifies management, though you can aggregate IRA RMDs regardless. For 401(k)s, consolidating former employers' plans into an IRA (rollover) can simplify, but consider whether the still-working exception or plan-specific benefits are lost.

Use the still-working exception. If you work past RMD age and your employer's plan allows, delay RMDs from that plan until retirement. This can defer taxation on a significant balance.

Plan for heirs. RMDs and account type affect heirs too. Leaving Roth IRAs (no RMDs during your life, tax-free to heirs) rather than large traditional balances can be more tax-efficient for your estate. See our estate planning guide.

RMD planning is a multi-year, proactive effort best done with a tax advisor. The goal is to manage taxable income across your retirement years to minimize the total tax burden, rather than passively accepting the RMD schedule. See our tax planning for high earners guide for advanced strategies.

The Bottom Line

Required minimum distributions force you to withdraw — and tax — your pre-tax retirement savings starting at a specific age (currently 73, scheduled to rise). Missing an RMD carries a severe penalty (25% of the shortfall, reducible to 10% if corrected), so take them on time, every year — automate them with your custodian. RMDs apply to traditional IRAs, 401(k)s, and other pre-tax accounts, but not to Roth IRAs during your lifetime. To minimize the tax bite, start withdrawals before RMD age when beneficial, use Roth conversions in low-bracket years, direct QCDs to charity (which count toward your RMD tax-free), coordinate Social Security timing, and manage your taxable income across years. RMD planning is proactive and multi-year — work with a tax advisor to minimize the total tax burden across your retirement. Use our retirement savings calculator and Social Security calculator to model your plan, and see our retirement planning guide for the full framework.