CEO, The Savvy Investor Limited · Investment Educator
Updated: 13 June 2026 · Reading time: 9 minutes
⚠️ Important: This article provides educational information for US taxpayers and is not personalised tax or investment advice. RMD amounts and deadlines depend on your accounts, birth year, and circumstances. Missing one is expensive. Please confirm your own RMD with your custodian or a qualified tax professional.
For decades the deal with a traditional 401(k) or IRA is simple: you get a tax break going in, your money grows untaxed, and you settle up with the IRS when you take it out. Required minimum distributions, or RMDs, are how the IRS makes sure that day eventually comes. From a set age, you must withdraw a minimum amount each year and pay income tax on it, whether you need the money or not.
SECURE 2.0 pushed the starting age back and softened the penalty, which is good news, but it also created a timing trap that catches people in their very first RMD year. Here is everything you need for 2026.
The short version
- RMDs now start at age 73 for anyone born between 1951 and 1959, and at age 75 for anyone born in 1960 or later.
- Your first RMD can be delayed to 1 April of the year after you turn 73, but doing so forces two RMDs into one tax year. Often a costly choice.
- Every RMD after the first is due by 31 December.
- The amount is your prior-year-end balance divided by an IRS life-expectancy factor (26.5 at age 73).
- The penalty for missing an RMD is 25% of the shortfall, cut to 10% if you correct it within two years.
- Roth IRAs have no RMDs during the owner’s lifetime, and since 2024 neither do Roth 401(k)s.
- Three legitimate ways to shrink RMDs: Roth conversions in your 60s, qualified charitable distributions, and the still-working exception.
Which accounts have RMDs?
RMDs apply to tax-deferred accounts: traditional IRAs, SEP and SIMPLE IRAs, and employer plans like 401(k), 403(b) and governmental 457(b). They do not apply to Roth IRAs while the owner is alive, and from 2024 they no longer apply to Roth 401(k)s either, which removed a long-standing quirk that used to push people to roll Roth 401(k)s into Roth IRAs purely to dodge RMDs.
The new starting ages
| Birth year | RMDs start at age | First RMD year |
|---|---|---|
| 1950 or earlier | 72 (already started under older rules) | Past |
| 1951 to 1959 | 73 | The year you turn 73 |
| 1960 or later | 75 | The year you turn 75 |
So someone born in 1953 turns 73 in 2026 and takes their first RMD for the 2026 tax year. Someone born in 1962 will not face RMDs until 2037.
The first-year trap
Your first RMD has a special deadline: you can take it any time up to 1 April of the year after the year you turn 73. It sounds like a helpful extension, and for one specific group it is a trap.
⚠️ Two RMDs in one year
If you delay your first RMD into the following year, your second RMD is still due by 31 December of that same year. You end up taking two taxable withdrawals in one calendar year, which can push you into a higher bracket, increase the taxable portion of your Social Security, and trigger higher Medicare premiums (IRMAA) two years later.
Unless you have a specific low-income reason to defer (for example, you retire mid-year and expect a much lower-income following year), taking your first RMD in the year you turn 73 is usually cleaner.
How to calculate your RMD
The formula is straightforward: take your account balance on 31 December of the prior year and divide by the life-expectancy factor for your age from the IRS Uniform Lifetime Table.
📊 Worked example: age 73
- Traditional IRA balance on 31 December 2025: $500,000
- Uniform Lifetime Table factor at 73: 26.5
- 2026 RMD: $500,000 ÷ 26.5 = $18,868
That $18,868 is added to your taxable income for 2026. The factor falls a little each year, so the percentage you must withdraw rises gradually as you age (roughly 4% at 73, climbing past 5% in your early 80s).
Two aggregation rules matter. IRAs can be combined: total your RMD across all traditional IRAs, then take it from any one of them. 401(k)s cannot: each employer plan needs its own RMD taken separately. Most custodians calculate the figure for you, but the legal duty to withdraw it is yours.
The penalty for missing one
Miss an RMD and the excise tax is 25% of the amount you failed to take. SECURE 2.0 reduces that to 10% if you withdraw the shortfall and file Form 5329 with a corrected return within two years. That is far gentler than the old 50% penalty, but the simplest plan is to set a recurring autumn reminder so it never happens.
Three ways to shrink your RMDs (legitimately)
1. Roth conversions in your 60s
The years between retiring and starting RMDs are often your lowest-income years, and a golden window. Converting some traditional IRA money to a Roth in those years means paying tax now at a low rate, and permanently removing that money from future RMDs (Roth IRAs have none). Done well, this flattens your lifetime tax bill. See our Roth conversion ladder guide for the mechanics.
2. Qualified charitable distributions (QCDs)
From age 70 and a half you can send money directly from your IRA to a qualified charity. A QCD counts toward your RMD but is excluded from your taxable income, which is more valuable than taking the RMD and then donating, because it lowers your adjusted gross income (and with it, Medicare premiums and the taxable share of Social Security). The annual QCD limit is indexed each year (it was around $108,000 for 2025; confirm the current cap before relying on it).
3. The still-working exception
If you are still working past 73 and do not own 5% or more of the company, you can usually delay RMDs from that current employer’s plan until you actually retire. It does not apply to IRAs or to old 401(k)s from former employers, so some people roll old plans into a current employer’s plan to park them under this shelter.
Frequently asked questions
Can I just reinvest my RMD?
Yes. You must withdraw and pay tax on the RMD, but you are free to reinvest the after-tax proceeds in an ordinary taxable brokerage account. The RMD rule forces the money out of the tax shelter; it does not force you to spend it.
Do RMDs apply to my Roth IRA?
No, not during your lifetime. This is one of the strongest arguments for building Roth balances before you retire. Inherited Roth IRAs are a separate matter, covered in our inherited IRA guide.
How do RMDs affect my taxes and Medicare?
RMDs are ordinary income. A large RMD can raise the taxable portion of your Social Security and, two years later, push you into a higher Medicare Part B and Part D premium bracket (IRMAA). This ripple effect is exactly why Roth conversions and QCDs are worth planning in advance.
What if I have several IRAs and 401(k)s?
Calculate the RMD for each account. You may total your IRA RMDs and take the combined amount from any single IRA, but each 401(k) RMD must come out of that specific plan.
Want to reduce RMDs before they start?
The decade before 73 is where the planning happens.