Required Minimum Distributions (RMDs) Explained: Rules, Calculations, and Strategies for 2026
Everything you need to know about RMDs in 2026. When they start (age 73 or 75), how to calculate yours, the 25% penalty for missing one, QCD strategies, and how Roth conversions can reduce future RMDs.
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📋 What Are RMDs and Why Do They Exist?
Required Minimum Distributions are mandatory annual withdrawals from tax-deferred retirement accounts — Traditional IRAs, 401(k)s, 403(b)s, and most employer-sponsored plans. The IRS requires these distributions because, without them, you could theoretically defer taxes on your retirement savings forever (and pass them to heirs still tax-deferred). RMDs ensure the government eventually collects income tax on money that received a tax deduction when it went in.
The amount you must withdraw is calculated using a formula: divide your prior year-end account balance by a life expectancy factor from IRS tables. As you age, the divisor gets smaller, meaning you withdraw a larger percentage each year — roughly 3.8% at age 73, 4.1% at age 75, 5.0% at age 80, and 6.3% at age 85. Every dollar you withdraw is taxed as ordinary income (assuming it was pre-tax money).
RMDs are the minimum you must take — there is no maximum. You can always withdraw more than the RMD. The planning opportunity is in the years before RMDs begin: by doing strategic Roth conversions during lower-income years (early retirement, gap years), you can shrink the Traditional IRA balance that will eventually be subject to RMDs — permanently reducing your future tax burden.
📅 When Do RMDs Start? The Age Rules
Thanks to the SECURE 2.0 Act, the RMD starting age has been raised in stages:
| Your Birth Year | RMD Starting Age | When You Take Your First RMD |
|---|---|---|
| 1950 or earlier | 72 | Already started |
| 1951–1959 | 73 | Year you turn 73 |
| 1960 or later | 75 | Starting in 2033 |
You can delay your first RMD until April 1 of the year after you reach the RMD age. But beware: if you delay, you will owe two RMDs in that calendar year (the delayed first one plus the regular second one), which could push you into a higher tax bracket. Most advisors recommend taking your first RMD in the year you turn 73 (or 75) to avoid the double-RMD problem.
Still working exception: If you are still employed and your employer plan allows it, you can delay RMDs from that specific employer's 401(k) until the year you retire — even past age 73. This does not apply to IRAs or 401(k)s from previous employers, only the plan at your current job. And you must own less than 5% of the company.
🧮 How to Calculate Your RMD
The formula is straightforward: RMD = December 31 prior-year account balance ÷ IRS life expectancy factor.
For your 2026 RMD, use your account balance as of December 31, 2025. Then find your age (as of your birthday in 2026) on the IRS Uniform Lifetime Table and use the corresponding distribution period (divisor). Here are the most commonly needed factors:
| Age in 2026 | Distribution Period | Approx. % Withdrawn | RMD on $500K Balance |
|---|---|---|---|
| 73 | 26.5 | 3.77% | $18,868 |
| 75 | 24.6 | 4.07% | $20,325 |
| 78 | 22.0 | 4.55% | $22,727 |
| 80 | 20.2 | 4.95% | $24,752 |
| 85 | 16.0 | 6.25% | $31,250 |
| 90 | 12.2 | 8.20% | $40,984 |
If you have multiple Traditional IRAs, you calculate the RMD for each separately but can withdraw the total from any single IRA or combination. For 401(k) and 403(b) plans, you must take the RMD from each plan individually — you cannot aggregate across employer plans. Our Calculator Vault includes a retirement distribution calculator to model your specific scenario.
🏦 Which Accounts Require RMDs?
| Account Type | RMDs Required? | Notes |
|---|---|---|
| Traditional IRA | Yes | Aggregation allowed across all Traditional IRAs |
| 401(k) / 403(b) (pre-tax) | Yes | Must take from each plan separately |
| Roth IRA | No (owner's lifetime) | No RMDs while you are alive; beneficiaries have rules |
| Roth 401(k) | No (starting 2024) | SECURE 2.0 eliminated Roth 401(k) RMDs |
| Inherited IRA | Yes | 10-year rule for most non-spouse beneficiaries |
| HSA | No | No RMDs ever; withdrawals for medical expenses are tax-free |
The Roth IRA exemption is a major reason to prioritize Roth contributions and conversions. Money in a Roth IRA never faces an RMD — it can grow tax-free for your entire life and be passed to heirs. If you have a Roth 401(k) and want to avoid inherited account complications, roll it to a Roth IRA before RMD age. For inherited IRA rules, see our Inherited IRA Guide.
⚠️ The Penalty for Missing an RMD
If you fail to take your full RMD by the deadline, the IRS imposes a 25% excise tax on the shortfall — the amount you should have withdrawn but did not. If you missed a $20,000 RMD, the penalty is $5,000. Under SECURE 2.0, this penalty was reduced from the previous 50% rate.
There is a second chance: if you correct the shortfall within two years (by withdrawing the missed amount and filing an amended return), the penalty drops to 10%. You can also request a waiver by filing IRS Form 5329 and explaining that the failure was due to reasonable error and that you have taken steps to remedy it. The IRS grants these waivers fairly routinely when the taxpayer can show good cause.
If you turn 73 in 2026 and delay your first RMD to April 1, 2027, you owe two RMDs in 2027: the delayed 2026 RMD plus the regular 2027 RMD. On a $600,000 IRA, that is roughly $45,000 in one year — all taxed as ordinary income, potentially pushing you into the 22% or 24% bracket when you would otherwise be in the 12%. Take your first RMD in the calendar year you turn 73 to avoid this bracket bump.
🎁 QCDs: The Tax-Free RMD Strategy
A Qualified Charitable Distribution (QCD) lets you transfer up to $111,000 per year (2026 limit) directly from your IRA to a qualified charity. The distribution satisfies your RMD requirement, counts as a charitable donation, but is excluded from your taxable income. You do not get a separate charitable deduction (since the income was never included), but the net effect is better: you avoid the income entirely rather than taking a deduction against it.
QCDs are especially valuable if you do not itemize deductions (and therefore cannot claim a charitable deduction anyway), if your total RMD exceeds what you need for living expenses, or if additional taxable income would trigger Medicare IRMAA surcharges or increase Social Security taxation. The one-time QCD to a charitable gift annuity (up to $55,000 lifetime in 2026) provides both a charitable benefit and a predictable income stream. Our Turning 65 Checklist covers QCDs in the context of overall retirement planning.
📉 How to Reduce Your Future RMDs
The size of your RMD is determined by your account balance. Shrink the balance before RMDs begin, and your required distributions — and the associated taxes — will be permanently lower. Here are the most effective strategies:
1. Roth conversions before RMD age. Convert Traditional IRA money to Roth during low-income years (early retirement, gap years between jobs). You pay tax on the conversion now at your current (presumably lower) rate, and the money moves to a Roth IRA where it faces no RMDs ever. This is the single most impactful RMD reduction strategy. Our Roth Conversion Ladder guide has the full playbook.
2. Maximize QCDs after RMDs begin. Every dollar donated via QCD is a dollar of RMD that does not appear on your tax return. If you would normally donate to charity anyway, routing those donations through QCDs is strictly better than donating from your bank account.
3. Delay Social Security to reduce early retirement income. If you do Roth conversions in the years before claiming Social Security, your taxable income is lower — allowing larger conversions in lower brackets. Once Social Security and RMDs are both flowing, your income (and tax bracket) may be higher than during those strategic conversion years.
4. Use your HSA for medical expenses. Instead of withdrawing from your Traditional IRA for medical costs (which increases taxable income), use your HSA — withdrawals for qualified medical expenses are completely tax-free and do not affect your RMD obligations or tax brackets.