Required Minimum Distributions: When RMDs Start, How to Calculate Yours, and the 25% Penalty

A required minimum distribution (RMD) is the smallest amount you must withdraw each year from a traditional IRA or workplace retirement plan once you reach your applicable RMD age, and you calculate it by dividing the account balance from December 31 of the prior year by a factor published in the IRS Uniform Lifetime Table. Your start age is 73 or 75 depending on the year you were born, your first withdrawal is due by April 1 of the following year, and skipping it triggers a 25% federal excise tax that drops to 10% if you fix the shortfall in time. This guide walks through which accounts count, the exact table factors, a worked calculation, and the exceptions that change the answer.

This article is general information, not financial or tax advice. Retirement account rules turn on details specific to your plan documents, your beneficiary designations, and your filing situation. Verify your own figures with the IRS or a licensed tax professional before you act.

Which Accounts Require an RMD and Which Do Not

RMD rules apply to tax-deferred retirement accounts. If the money went in pre-tax and has never been taxed, the federal government eventually wants its share, and the RMD is the mechanism that forces the withdrawal.

Accounts that are subject to RMDs during your lifetime:

• Traditional IRAs
• SEP IRAs
• SIMPLE IRAs
• 401(k) plans
• 403(b) plans
• 457(b) plans
• Profit-sharing plans and other defined contribution plans
• The federal Thrift Savings Plan

Accounts that are not subject to RMDs while the owner is alive:

• Roth IRAs
• Designated Roth accounts inside a 401(k) or 403(b) plan

The Roth 401(k) exemption is worth flagging because it is relatively new. Designated Roth accounts inside workplace plans used to require distributions, and that requirement was eliminated starting with the 2024 tax year. If you were previously taking RMDs from a Roth 401(k), that obligation no longer exists.

One important limit on the exemption: it covers the original owner only. RMD rules do apply to the beneficiaries who inherit a Roth IRA or a designated Roth account, and inherited-account rules follow a separate framework from the one described here.

Your RMD Start Age Depends on the Year You Were Born

There is no single RMD age. Two rounds of federal retirement legislation pushed the starting age up in stages, so the correct age depends entirely on your date of birth. Using the wrong age is one of the most common RMD errors, because a lot of older reference material still says 70 and a half or 72.

The 1959 birth year is a genuine drafting quirk. As written, the statute appears to place people born in 1959 under both the age 73 and the age 75 rules. Final IRS regulations reserved a paragraph on this point, and proposed regulations clarify that individuals born in 1959 begin taking RMDs after reaching age 73. If you were born in 1959, treat 73 as your age and confirm the current position with the IRS or a tax professional before your first distribution year.

Stated the other way: the applicable age is 73 for people who turn 72 after December 31, 2022 and turn 73 before January 1, 2033, and it rises to 75 for people who turn 73 after December 31, 2032.

The Required Beginning Date and the First-Year Two-Distribution Trap

Your required beginning date is April 1 of the calendar year following the year in which you reach your applicable RMD age. Every RMD after that first one is due by December 31 of the year it applies to.

That mismatch creates a trap. If you use the April 1 grace period for your first RMD, you take two taxable distributions in the same calendar year: the delayed first-year RMD in the spring, and the second-year RMD by December 31 of that same year. Both land on the same tax return, which can push you into a higher marginal bracket, increase the taxable portion of your Social Security benefits, and raise your Medicare premium surcharges two years later.

Worked example. Suppose you turn 73 in 2026:

1. Your 2026 RMD is due no later than April 1, 2027.
2. Your 2027 RMD is due no later than December 31, 2027.
3. If you delay step 1 until early 2027, both distributions are reported as 2027 income.
4. If you instead take the 2026 RMD by December 31, 2026, each distribution falls in its own tax year.

For most people the second option produces a lower combined tax bill, but the arithmetic depends on your income in each year. Run the two-year comparison before you choose.

For workplace plans, the required beginning date can be later. It is April 1 following the later of the year you reach your applicable age or the year you retire, if the plan allows that delay. That option does not exist for IRAs.

How to Calculate Your RMD Using the Uniform Lifetime Table

The formula has only two inputs:

RMD = (account balance on December 31 of the previous year) divided by (the applicable denominator for your age this year)

The applicable denominator comes from the IRS Uniform Lifetime Table. You use this table if you are unmarried, if your spouse is not more than 10 years younger than you, or if your spouse is not the sole beneficiary of the account. That covers the large majority of account owners.

The table continues past age 95 and bottoms out at a denominator of 2.0 for ages 120 and over.

Three worked examples, using the balance from December 31 of the prior year:

• Age 73, balance of $500,000: $500,000 divided by 26.5 equals $18,868, about 3.8% of the balance.
• Age 75, balance of $750,000: $750,000 divided by 24.6 equals $30,488, about 4.1% of the balance.
• Age 80, balance of $300,000: $300,000 divided by 20.2 equals $14,851, about 5.0% of the balance.

Notice the pattern: the required percentage climbs every year. It is roughly 3.8% at 73, about 5.0% at 80, and about 8.2% at 90. That escalation is the whole design of the table, and it is why RMD-driven taxable income tends to grow faster than most people plan for.

Two mechanical details that trip people up. First, use the balance as of December 31 of the prior year, not today’s balance, and do not reduce it for a distribution made after that date. Second, use your age as of your birthday in the distribution year, not your age on the day you take the money out.

When You Use the Joint Life and Last Survivor Table Instead

There is one substitution. If your spouse is both the sole designated beneficiary of the account and more than 10 years younger than you, you use the Joint Life and Last Survivor Expectancy table rather than the Uniform Lifetime table. Because that table reflects two life expectancies, the denominator is larger and your required withdrawal is smaller.

Both conditions have to be true. A spouse who is 15 years younger but shares the beneficiary designation with a child does not qualify, and a sole-beneficiary spouse who is only 8 years younger does not either.

For this purpose, your marital status is determined as of January 1 of each year. If your spouse is a beneficiary on January 1, they remain your beneficiary for the entire year for RMD math even if you divorce or they die later in that year.

Which Accounts You Can Combine to Satisfy an RMD

You always calculate the RMD separately for each account. Whether you can then satisfy the total from a single account depends on the account type, and getting this wrong is a common way to trigger a penalty while believing you complied.

So if you hold three traditional IRAs, you compute three RMD amounts, add them up, and may pull the entire sum from whichever IRA you prefer. If you hold two old 401(k) accounts from former employers, you must take a separate distribution from each one. IRA RMDs and 401(k) RMDs cannot be mixed together in either direction.

This is one practical argument for consolidating old workplace plans into a single IRA well before your RMD age arrives, though a rollover has its own tax and creditor-protection consequences worth reviewing first.

Three Exceptions That Change Your Answer

Still Working Past Your RMD Age

If you participate in a workplace retirement plan such as a 401(k) or profit-sharing plan, you can generally delay RMDs from that plan until the year you actually retire. Two conditions apply: you cannot be a 5% owner of the business sponsoring the plan, and the plan document has to permit the delay. Some plans require distributions at the applicable age regardless of employment status, so read your summary plan description rather than assuming.

The exception is narrow in an important way. It never applies to IRAs. Working at 78 does not postpone your traditional IRA RMD, and it does not postpone RMDs from a former employer’s plan either, only from the plan of the employer you are currently working for.

Qualified Charitable Distributions

If you are at least 70 and a half at the time of the distribution, you can direct money from an IRA to a qualifying charity as a qualified charitable distribution (QCD). A QCD counts toward your RMD but is excluded from your gross income, which is often better than taking the distribution and claiming a charitable deduction, because it lowers adjusted gross income directly.

For the 2026 tax year, the annual QCD exclusion limit is $111,000 per person. On a joint return, a spouse with their own IRA can exclude up to $111,000 as well. There is also a separate one-time election to make a QCD to a split-interest entity such as a charitable remainder annuity trust or charitable gift annuity, capped at $55,000 for the 2026 tax year. These caps are indexed for inflation and change annually, so confirm the current year’s figure before you give.

Note the age gap: QCD eligibility begins at 70 and a half, which is earlier than any current RMD start age. You can use QCDs for years before your RMDs even begin. Also note that if a QCD is excluded from income, you cannot also claim it as an itemized charitable contribution deduction.

An RMD Can Never Be Rolled Over or Converted

Amounts that must be distributed for a given year are not eligible for rollover treatment. You cannot roll an RMD into another IRA, and you cannot convert it to a Roth IRA. If you plan to do a Roth conversion in a year you owe an RMD, the RMD has to come out first, and the conversion applies only to amounts above it.

Once distributed, the cash itself is yours to use for anything except a contribution back into a retirement account. Reinvesting the after-tax proceeds into a regular taxable brokerage account is entirely permitted, and it is a reasonable option if you do not need the money for spending.

Missing an RMD: The 25% Excise Tax and the 10% Correction

If you withdraw less than your required minimum for a year, the shortfall is subject to a 25% federal excise tax. That tax applies to the amount you failed to distribute, not to the entire account, and it sits on top of the ordinary income tax you owe once the money finally comes out.

The rate drops to 10% if you correct the failure within the correction window. That window ends on the earliest of three dates:

1. The date the IRS mails a notice of deficiency for this tax,
2. The date the tax is assessed, or
3. The last day of the second taxable year beginning after the end of the taxable year in which the tax was imposed.

Correcting means actually taking a distribution of the missed amount and filing a return that reflects the additional tax. Report the excise tax on Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts.

There is also a waiver path. If the shortfall was due to reasonable error and you have taken or are taking steps to remedy it, you may request that the tax be waived entirely. The request goes in with Form 5329 along with an explanation. A waiver is a request, not an entitlement, so the safer plan is to set a December calendar reminder and confirm each year that every account has been satisfied.

Frequently Asked Questions

Do I have to take an RMD from my Roth IRA?

No. Roth IRAs are not subject to required minimum distributions during the original owner’s lifetime, and neither are designated Roth accounts inside a 401(k) or 403(b) plan as of the 2024 tax year. The exemption ends at death: beneficiaries who inherit a Roth IRA or designated Roth account are subject to distribution requirements under the rules that apply to inherited accounts.

What happens if I take more than my RMD in a year?

Nothing is wrong with withdrawing more, and the extra amount is simply taxed as ordinary income like the rest of the distribution. What you cannot do is bank the excess. Taking twice your RMD this year does not reduce or satisfy next year’s requirement, because each year’s calculation restarts from that year’s opening balance and that year’s table factor.

Can I take my IRA RMD from my 401(k), or the reverse?

No. IRA required distributions and 401(k) required distributions are computed and satisfied in separate silos. You may aggregate across multiple IRAs and satisfy the combined total from any one of them, and you may aggregate across multiple 403(b) contracts, but a 401(k) or 457(b) plan requires its own separate distribution and cannot be covered by a withdrawal from an IRA.

How do I know which balance to use for the calculation?

Use the fair market value of the account as of December 31 of the year before the distribution year. Your IRA custodian or plan administrator reports that figure to you, usually on a year-end statement or Form 5498. Distributions made after that December 31 date reduce the balance used for the following year, not the year you are currently calculating.

Do I have to spend my RMD?

No. There is no requirement that the money be used for retirement expenses or anything else. The only restriction is that an RMD cannot be rolled over or contributed back into a retirement account. Many people who do not need the cash simply move it into a taxable brokerage account, or route it to charity as a qualified charitable distribution if they are at least 70 and a half.

Related reading

• Working While Collecting Social Security: The 2026 Earnings Test Limits and the $1-for-$2 Rule
• Standard Deduction for the 2026 Tax Year: Amounts by Filing Status, the Age 65 Add-On, and When Itemizing Still Wins
• How to Dispute a Credit Report Error (FCRA Guide)

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