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What is Required Minimum Distribution (RMD)?
Required Minimum Distribution (RMD) is the minimum amount you must withdraw from your retirement accounts each year once you reach a certain age. The IRS requires these withdrawals to ensure that retirement savings are eventually taxed.
Accounts subject to RMD:
- Traditional IRA
- SEP IRA
- SIMPLE IRA
- 401(k), 403(b), 457(b) plans
- Roth 401(k) (but NOT Roth IRA)
💡 Key Insight: Roth IRAs are NOT subject to RMD during the owner's lifetime. This is a major advantage of Roth IRAs over traditional IRAs.
RMD Age Requirements for 2026
The SECURE Act (2019) and SECURE 2.0 Act (2022) changed the RMD starting age multiple times. For 2026, the rules are:
| Birth Year | RMD Starts At Age | First RMD Deadline |
|---|---|---|
| Before 1951 | 72 | April 1 of year after turning 72 |
| 1951-1959 | 73 | April 1 of year after turning 73 |
| 1960 or later | 75 | April 1 of year after turning 75 |
Example: If you were born in 1955, you turn 73 in 2028. Your first RMD must be taken by April 1, 2029. However, you can delay your first RMD until April 1 of the following year, but then you'll have two RMDs in one tax year (which may push you into a higher tax bracket).
How to Calculate Your RMD
The RMD calculation formula is simple:
RMD = Account Balance (Dec 31 of prior year) ÷ Life Expectancy Factor
Example Calculation:
- Your IRA balance on December 31, 2025: $500,000
- You turn 75 in 2026, so your life expectancy factor (from IRS Uniform Lifetime Table): 24.6
- Your 2026 RMD = $500,000 ÷ 24.6 = $20,325
You must withdraw at least this amount by December 31, 2026 (or April 1, 2027 for your first RMD).
2026 IRS Uniform Lifetime Table (Partial)
The IRS provides three tables for RMD calculations. Most people use the Uniform Lifetime Table. Here are key ages:
| Age | Life Expectancy Factor | % of Account (approx) |
|---|---|---|
| 72 | 27.4 | 3.65% |
| 75 | 24.6 | 4.07% |
| 80 | 20.2 | 4.95% |
| 85 | 16.0 | 6.25% |
| 90 | 12.2 | 8.20% |
| 95 | 8.9 | 11.24% |
| 100 | 6.3 | 15.87% |
Source: IRS Publication 590-B
RMD Penalty: 25% Excise Tax
If you fail to take your full RMD by the deadline, the IRS imposes a 25% excise tax on the amount you should have withdrawn but didn't.
⚠️ Example Penalty:
Your RMD is $20,000. You forgot to take it. Penalty = $20,000 × 25% = $5,000
How to avoid the penalty:
- Set up automatic withdrawals from your IRA/401(k)
- Mark RMD deadlines on your calendar
- Use our free RMD Calculator to calculate your RMD each year
- If you miss an RMD, file Form 5329 and request a penalty waiver (if you have reasonable cause)
Tax Strategies to Minimize RMD Impact
1. Roth Conversion Before RMD Age
Convert traditional IRA funds to Roth IRA before you reach RMD age. Roth IRAs don't have RMDs, so this reduces future RMDs. However, you'll pay taxes on the converted amount now. Use our Roth Conversion Calculator to see if this strategy works for you.
2. Qualified Charitable Distribution (QCD)
If you're 70½ or older, you can donate up to $100,000 per year directly from your IRA to charity. This counts toward your RMD but is NOT included in your taxable income. This is a powerful strategy for charitably inclined retirees.
3. Delay Retirement Plan RMDs (if still working)
If you're still working at age 73+, you can delay RMDs from your current employer's 401(k) until you retire (but not for IRAs or old 401(k)s). This is called the "still-working exception."
Frequently Asked Questions
Q: Do I have to take RMD from each account separately?
A: For IRAs, you can aggregate all your IRAs and take the total RMD from one IRA. For 401(k)s, you must take separate RMDs from each 401(k) plan.
Q: Are RMDs taxable?
A: Yes, RMDs from traditional IRAs and 401(k)s are taxed as ordinary income. However, if you made non-deductible contributions to your traditional IRA, part of the RMD may be tax-free (use Form 8606).
Q: Can I reinvest my RMD?
A: Yes, but you must first withdraw the RMD and pay taxes on it. Then you can invest the after-tax amount in a taxable brokerage account, CD, or other investment.
Calculate Your 2026 RMD Now
Use our free RMD Calculator to determine exactly how much you need to withdraw this year.
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