Required Minimum Distributions—usually called RMDs—are an important part of retirement planning for anyone with tax-deferred retirement savings.
For decades, you may have contributed money to a traditional IRA, 401(k), 403(b), or another retirement plan and allowed those savings to grow without paying income tax on all of that money along the way. Eventually, however, federal tax rules generally require you to begin withdrawing a portion of those savings.
That’s where RMDs come in.
Understanding when RMDs begin, how they are calculated, and how they affect your taxes can help you avoid penalties and make better decisions about your retirement income.
The rules can look complicated at first, but the basic idea is relatively simple: once you reach the applicable age, the IRS generally requires you to withdraw at least a minimum amount from certain retirement accounts each year.
Here’s what retirees and people approaching retirement should know.
1. What Are Required Minimum Distributions?
A Required Minimum Distribution is the minimum amount you generally must withdraw each year from certain tax-deferred retirement accounts once you reach the applicable starting age.
RMD rules exist because traditional retirement accounts receive valuable tax advantages. Contributions may have been deductible, and investment earnings can generally grow tax-deferred while the money remains in the account.
RMDs eventually move some of that money out of the tax-deferred retirement system, where distributions are generally included in taxable income unless an exception applies.
RMD rules commonly apply to:
- Traditional IRAs
- SEP IRAs
- SIMPLE IRAs
- Traditional 401(k) accounts
- 403(b) plans
- 457(b) plans
- Profit-sharing plans
- Certain other employer-sponsored retirement plans
An important exception involves Roth accounts.
Under current rules, Roth IRAs and designated Roth accounts in employer plans, such as Roth 401(k)s and Roth 403(b)s, do not require RMDs while the original account owner is alive.
Beneficiaries who inherit Roth accounts, however, may be subject to different distribution requirements.
The IRS provides detailed information about which accounts are covered by RMD rules and how distributions are calculated. [IRS: Retirement Topics — Required Minimum Distributions]
2. When Do RMDs Start?
This is one area where retirement rules have changed significantly.
Under current federal law, many people begin RMDs at age 73, but the applicable starting age depends on when you were born.
The SECURE 2.0 Act increased the applicable RMD age to 73 for people who reach age 72 after December 31, 2022, and reach age 73 before January 1, 2033. The law also provides for an increase to age 75 for later cohorts beginning in 2033.
Because these rules depend on your birth year, don’t automatically assume that 73 will be your RMD age.
For someone whose applicable RMD age is 73, the first RMD is for the calendar year in which that person turns 73.
However, there is a special rule for the first distribution.
You generally have until April 1 of the following year to take your first RMD.
After that, annual RMDs generally must be taken by December 31.
Be Careful About Delaying Your First RMD
Waiting until the following year sounds attractive, but there is a potential drawback.
If you delay your first RMD until the following year, you will generally need to take both your delayed first RMD and your second RMD during the same calendar year.
For example, suppose your first RMD is $15,000 and you delay it until March of the following year. Your second RMD for that following year is $16,000.
You could end up receiving $31,000 of RMDs during one tax year.
Depending on the rest of your income, that additional taxable income could potentially affect your federal income taxes and other income-related costs.
For that reason, delaying the first RMD isn’t automatically the best choice.
3. How Is Your RMD Calculated?
The basic RMD calculation is straightforward.
Generally, you take the retirement account’s balance as of December 31 of the previous year and divide it by the applicable IRS life-expectancy factor.
The basic formula is:
Previous December 31 Account Balance ÷ IRS Distribution Period = RMD
Most account owners use the IRS Uniform Lifetime Table.
A different table generally applies when your spouse is your sole beneficiary and is more than 10 years younger than you.
Example: Calculating an RMD
Suppose a retiree has a traditional IRA worth $500,000 on December 31 of the previous year.
Assume the appropriate IRS distribution factor is 26.5.
The calculation would be:
$500,000 ÷ 26.5 = $18,867.92
The required distribution would therefore be approximately $18,868 for that year.
The retiree could withdraw more than $18,868 if desired, but generally could not withdraw less without potentially creating an RMD shortfall.
Banks, brokerage firms, and retirement-plan administrators often provide estimated RMD calculations. However, the account owner is ultimately responsible for making sure the correct amount is distributed.
4. How Do RMDs Work When You Have Multiple Accounts?
Having several retirement accounts can make RMDs more complicated.
Suppose you have three traditional IRAs.
Generally, you calculate the RMD for each IRA separately. However, once you’ve calculated the total required amount for your IRAs, you generally may take that combined amount from one IRA or divide it among multiple IRAs.
For example:
- IRA #1 RMD: $5,000
- IRA #2 RMD: $3,000
- IRA #3 RMD: $2,000
Your total IRA RMD is $10,000.
Depending on the applicable rules, you could potentially withdraw the entire $10,000 from IRA #1 rather than withdrawing separately from all three.
Employer-sponsored retirement plans can follow different aggregation rules, so don’t assume that the IRA rule applies to your 401(k), 403(b), or other workplace accounts.
Check with the plan administrator or a qualified tax professional before combining distributions.
5. What If You’re Still Working?
RMD rules can be different for people who continue working beyond the normal RMD age.
Under current IRS rules, participants in certain employer-sponsored retirement plans may be able to delay RMDs from their current employer’s plan until retirement.
This exception generally does not apply if you own more than 5% of the company sponsoring the plan.
It also doesn’t normally allow you to postpone RMDs from traditional IRAs simply because you’re still working.
For example, someone who is 74 and still employed may be able to delay an RMD from the 401(k) maintained by the employer for whom they currently work, assuming the plan permits it and the ownership rules are satisfied.
The same person could still be required to take an RMD from a traditional IRA.
6. What Happens If You Miss an RMD?
Failing to take the required distribution can result in an excise tax.
Under current rules, the excise tax is generally 25% of the amount that should have been distributed but wasn’t.
The rate can potentially be reduced to 10% when the shortfall is corrected within the applicable correction period and other requirements are satisfied.
For example, suppose your required distribution was $12,000, but you accidentally withdrew only $10,000.
Your shortfall would be:
$12,000 − $10,000 = $2,000
The potential excise tax would be based on the $2,000 shortfall, not the entire $12,000 RMD.
If you discover a missed or insufficient RMD, address it promptly rather than waiting until the next year. Tax forms and possible relief provisions may also be involved, so professional tax assistance can be valuable.
7. Can You Withdraw More Than Your RMD?
Yes.
An RMD is a minimum, not a maximum.
If your RMD is $15,000 but you need $25,000 for living expenses, you can generally withdraw the additional $10,000.
However, additional withdrawals from traditional tax-deferred retirement accounts are generally taxable as ordinary income, except to the extent a distribution represents previously taxed money or another exception applies.
There is another important point to remember:
Taking more than your RMD this year generally doesn’t reduce next year’s RMD.
If your RMD is $15,000 and you withdraw $25,000, you can’t normally treat the extra $10,000 as an advance payment toward next year’s required distribution.
8. Can You Reduce Future RMDs?
Although you can’t simply opt out of RMDs, retirement and tax planning before they begin may help reduce the size of future required distributions.
Roth Conversions
A Roth conversion moves money from a traditional retirement account into a Roth IRA.
The converted amount is generally taxable in the year of conversion, but once the money is inside the Roth IRA, qualified withdrawals can be tax-free and the original Roth IRA owner isn’t subject to lifetime RMDs.
For example, someone in their 60s might convert portions of a large traditional IRA over several years rather than converting everything at once.
This could reduce the traditional IRA balance that will eventually be used to calculate RMDs.
However, Roth conversions can create significant immediate tax consequences, so they should be evaluated carefully.
Withdrawals Before RMD Age
Some retirees intentionally withdraw money from tax-deferred accounts before RMDs begin.
For example, someone who retires at 65 but doesn’t need to begin RMDs for several more years may have a window in which taxable income is lower.
Strategic withdrawals during those years could reduce the balance remaining in tax-deferred accounts.
Whether that strategy makes sense depends on tax brackets, Social Security, investment income, Medicare considerations, and other factors.
9. Qualified Charitable Distributions Can Be Valuable
People who regularly give money to charity should understand Qualified Charitable Distributions, or QCDs.
Generally, an IRA owner who is at least 70½ years old may make a qualifying distribution directly from an IRA to an eligible charitable organization.
A QCD can count toward an RMD while potentially being excluded from taxable income.
For 2026, the annual QCD exclusion limit is $111,000 per eligible individual, according to IRS inflation adjustments. The limit is indexed and can change in future years. [IRS: 2026 Inflation Adjustments for Qualified Charitable Distributions]
Consider a simplified example.
Suppose your annual RMD is $20,000 and you already planned to donate $5,000 to an eligible charity.
If the transaction meets the QCD requirements and the $5,000 goes directly from your IRA to the eligible charity, that amount may count toward your RMD.
You would then have $15,000 of the RMD remaining to satisfy.
QCD rules contain important eligibility and documentation requirements, so make sure the transaction is structured correctly.
10. How Do RMDs Affect Your Taxes?
Traditional retirement-account distributions are generally included in ordinary taxable income, except for portions that have already been taxed or qualify for special tax treatment.
That means RMDs can affect more than simply the amount of income tax you owe.
Higher taxable income may potentially:
- Push some income into a higher tax bracket
- Increase the taxable portion of Social Security benefits
- Affect eligibility for certain deductions or credits
- Contribute to higher Medicare Part B and Part D premiums through income-related monthly adjustment amounts (IRMAA)
This is why RMD planning can be useful years before the first required distribution.
Imagine a retiree who expects $40,000 in Social Security benefits, $25,000 from a pension, and a $30,000 RMD.
Before considering other income, that person could have $95,000 of gross cash inflows from those three sources.
The actual federal taxable-income calculation would depend on many factors, including how much of the Social Security benefit is taxable, deductions, filing status, and any after-tax basis in retirement accounts.
The example nevertheless illustrates why RMDs should be considered as part of your overall retirement tax strategy rather than treated as an isolated annual withdrawal.
11. What If You Don’t Need Your RMD?
Taking an RMD doesn’t mean you have to spend the money.
Once you’ve satisfied the distribution requirement and paid any applicable taxes, you can generally use the money however you choose.
You might:
- Deposit it into savings
- Reinvest it in a taxable brokerage account
- Build an emergency fund
- Pay for travel
- Help family members
- Make charitable donations
- Pay down debt
- Cover healthcare or long-term care expenses
What you generally cannot do is simply leave the required amount inside the retirement account because you don’t need it.
If you want to continue investing the money, you can potentially reinvest the after-tax proceeds in an appropriate non-retirement account.
12. Don’t Forget About Inherited Retirement Accounts
RMD rules become considerably more complicated when retirement accounts are inherited.
Beneficiaries may be subject to different rules depending on factors such as:
- When the original owner died
- Whether the beneficiary is a surviving spouse
- The beneficiary’s age
- Whether the beneficiary is disabled or chronically ill
- Whether the original owner had begun RMDs
- The type of retirement account
Some beneficiaries are subject to a 10-year distribution rule, while others may qualify for different treatment.
Because inherited-account rules have changed in recent years, don’t assume that the rules that applied to a parent’s or friend’s inherited IRA years ago will apply to an account inherited today.
Check current IRS guidance when dealing with an inherited retirement account.
13. Create a Simple RMD Routine
One of the easiest ways to manage RMDs is to make them part of your annual financial routine.
At the beginning of each year:
- Identify every account potentially subject to an RMD.
- Confirm the prior December 31 balance.
- Determine the correct IRS distribution factor.
- Calculate the RMD for each applicable account.
- Determine whether any accounts can be aggregated.
- Decide where the distributions will come from.
- Consider the tax consequences.
- Complete your distributions before the applicable deadline.
- Keep records showing that the RMD was satisfied.
Some retirees choose to take their entire RMD early in the year. Others schedule monthly or quarterly distributions to create a regular retirement paycheck.
Neither approach is automatically best. What matters is satisfying the required amount by the deadline while choosing a withdrawal schedule that fits your cash-flow and investment needs.
Final Thoughts
Required Minimum Distributions may sound intimidating, but the basic concept is straightforward.
Once you reach your applicable RMD age, you generally must begin withdrawing a minimum amount each year from certain tax-deferred retirement accounts. The amount is typically based on your previous year-end account balance and an IRS life-expectancy factor.
The more important challenge is understanding how those distributions fit into your larger retirement plan.
RMDs can affect your taxable income, Medicare costs, charitable giving, investment strategy, and the amount of money you leave to heirs. Decisions made years before RMDs begin—such as Roth conversions or planned withdrawals—can also influence future required distributions.
Don’t wait until December to think about them.
Review your retirement accounts annually, verify your required amount, keep track of deadlines, and consult a qualified tax or financial professional when your situation becomes complicated.
With a little planning, RMDs can become a routine part of managing retirement income rather than an annual source of stress.
Sources: Internal Revenue Service, “Retirement Topics — Required Minimum Distributions (RMDs)” and related RMD guidance; Internal Revenue Service, 2026 inflation adjustments applicable to Qualified Charitable Distributions.
This article is for general educational purposes only and is not individualized tax, investment, financial, or legal advice. Tax laws and retirement-account rules can change, so check current IRS guidance or consult a qualified professional before making retirement or tax decisions.
