Required Minimum Distribution Facts All Retirees Need to Know Now

For anyone entering retirement, understanding how required minimum distributions (RMDs) work is essential. The rules carry real financial consequences, and several of them have shifted substantially over the past few years, making it easy to apply outdated assumptions to a framework that has already changed.

Tax-deferred accounts are subject to RMDs, which means account holders must withdraw a set minimum amount each year. Original owners of Roth IRA, Roth 401(k), and Roth 403(b) accounts are exempt from this requirement during their lifetimes. That exemption expanded when SECURE 2.0 eliminated lifetime RMDs from designated Roth accounts in employer plans, effective 2024.

Consult a financial advisor before calculating your RMD. The rules are detailed, and the penalties for getting them wrong are real.

No. 1: SECURE 2.0 Increased the RMD Age to 73 (and 75 Is Coming)

SECURE 2.0, passed in late 2022, was designed to expand retirement savings opportunities for Americans. Its provisions cover automatic enrollment in new workplace plans, penalty-free emergency withdrawals, enhanced catch-up contributions for older workers, and a higher starting age for RMDs. The underlying goal is to give savers more time for their money to compound before mandatory withdrawals begin.

Under current rules, if you were born before July 1, 1949, your RMD started at age 70.5. If born between July 1, 1949, and December 31, 1950, the threshold was 72. Anyone born between January 1, 1951, and December 31, 1959, has an RMD starting age of 73. A second increase is already scheduled: beginning January 1, 2033, the RMD age rises to 75 for those born in 1960 or later. That two-step framework gives the youngest savers still in the workforce a significantly longer runway before mandatory withdrawals arrive.

One practical detail trips up many first-year RMD recipients. The IRS allows you to delay your first RMD until April 1 of the year after you reach RMD age. Deferring sounds appealing for cash management, but it forces a second RMD by December 31 of that same year. Two distributions in one calendar year can push you into a higher tax bracket and increase Medicare premium surcharges based on that year’s income. Most retirees are better served by taking the first RMD in the year they turn 73 rather than deferring it.

No. 2: The RMD Aggregation Rules: Where You Can (and Cannot) Combine

Knowing how different accounts interact when satisfying your RMD is critical to avoiding IRS penalties. For traditional IRAs, including SEP and SIMPLE IRAs, you must calculate the RMD for each account individually. You can then total those amounts and withdraw the entire sum from a single IRA, or spread it across multiple accounts. A parallel aggregation rule applies to 403(b) plans: the combined required distribution may be satisfied from any single 403(b) account.

The flexibility stops there. No aggregation is permitted for 401(k) and 457(b) plans. The required distribution must be calculated and withdrawn from each individual employer plan separately. Inherited accounts add yet another layer of complexity: RMDs for accounts inherited from different individuals cannot be combined or cross-applied under any circumstance.

No. 3: SECURE 2.0 Reduced the RMD Penalty

Under the old rules, missing an RMD triggered a steep 50% excise tax on the amount that should have been withdrawn. SECURE 2.0 cut that penalty to 25%, giving retirees more room to recover from an oversight. The IRS reduces the excise tax further, to 10%, when the shortfall is corrected and the full RMD is withdrawn within two years of the original due date.

Catching the error early can cut the penalty by more than half and avoids the burden of filing a penalty abatement request with the IRS. The two-year correction window makes speed the most valuable tool available when a shortfall occurs. Prompt action, in practical terms, has significant dollar value.

No. 4: New Rules for Inherited Accounts

The original SECURE Act of 2019 required most non-spouse beneficiaries to deplete inherited retirement accounts within 10 years of the account holder’s death. SECURE 2.0 retained that 10-year rule and layered in additional guidance based on when the original owner died. Eligible designated beneficiaries, including spouses, chronically ill or disabled individuals, and anyone within 10 years of the owner’s age, can still stretch distributions over their own single life expectancy.

Adult children and other designated beneficiaries face stricter terms. If the owner died before reaching their Required Beginning Date, the heir must empty the account entirely by December 31 of the 10th anniversary year, with no annual interim RMDs required along the way. If the owner died on or after their Required Beginning Date, the beneficiary must take annual RMDs in years one through nine based on life expectancy and then fully drain the account by the tenth year. The IRS issued final regulations on July 19, 2024, and ended its enforcement waiver on the annual-distribution requirement after 2024, making the rule fully operative starting in 2025.

Further information on this topic can be found on this IRS page.

No. 5: SECURE 2.0 Increases Catch-Up Contributions

Starting January 1, 2025, individuals ages 60 to 63 became eligible for an enhanced “super” catch-up contribution of up to $11,250 to a qualifying workplace plan, a figure that carries over unchanged into 2026. That amount replaces the standard catch-up limit for those ages rather than stacking on top of it. The standard catch-up limit rose from $7,500 to $8,000 in 2026 for workers age 50 and older, layered on top of the base 401(k) deferral limit of $24,500. Coordinating those figures with a financial advisor is worthwhile, because plan sponsors are not required to offer the super catch-up option.

A Roth catch-up requirement also took effect in 2026, following final IRS regulations published in September 2025. If you earned more than $150,000 in prior-year FICA wages from the employer sponsoring your plan, all catch-up contributions to that workplace plan at age 50 or older must now be made to a Roth account in after-tax dollars. The $150,000 threshold for 2026 reflects an inflation adjustment from the original $145,000 baseline established by SECURE 2.0 and will continue to adjust going forward. Workers at or below the threshold remain exempt. If your employer’s plan does not currently offer Roth contributions, that restriction could prevent any catch-up contributions at all, so a conversation with your plan administrator is a practical first step.

No. 6: Neutralize the RMD Tax Shock with a QCD

RMDs from traditional accounts are taxed as ordinary income. That added income can push you into a higher tax bracket or trigger Medicare premium surcharges. For retirees with charitable intentions who do not need RMD proceeds for living expenses, a Qualified Charitable Distribution (QCD) offers a powerful alternative. Anyone age 70.5 or older can transfer up to $111,000 directly from an IRA to an eligible 501(c)(3) charity in 2026, up from $108,000 in 2025. That transfer satisfies your annual RMD obligation, either in full or in part, and the distributed amount is excluded entirely from your adjusted gross income. Married couples can each make a QCD from their own IRAs for a combined potential income exclusion of $222,000. One important restriction: QCDs cannot be directed to donor-advised funds or private foundations, and the transfer must go directly from the IRA custodian to the charity.

The QCD’s value is particularly strong in 2026. The One Big Beautiful Bill Act, signed into law on July 4, 2025, created two changes relevant to charitable giving for itemizers. It established a 0.5% of AGI floor on itemized charitable deductions, meaning only amounts donated above that threshold are deductible. It also caps the tax benefit of those deductions at 35% for taxpayers in the top 37% bracket. A QCD sidesteps both restrictions because it is an above-the-line exclusion from income, not a deduction. For those who take the standard deduction, the same law restored a separate non-itemizer deduction: up to $1,000 in cash charitable gifts for single filers, or $2,000 for joint filers. SECURE 2.0 also permits a one-time QCD of up to $55,000 to fund a Charitable Remainder Trust or a Charitable Gift Annuity, drawn from inside the $111,000 annual limit.

How to Calculate Your RMD

The IRS formula for calculating your RMD depends on three inputs: your total account balance as of December 31 of the prior year, your current age, and the applicable life expectancy factor from the IRS Uniform Lifetime Table. The agency divides the account balance by that factor, which represents the number of distribution years assigned to your age group. For a reference table, see the IRS Uniform Lifetime Table provided by Capital Group.

A concrete example illustrates the math. A 73-year-old has a life expectancy factor of 26.5 under the IRS table. With a prior December 31 account balance of $250,000, the RMD works out to $250,000 divided by 26.5, or a required withdrawal of $9,433.96. One important exception applies: if your spouse is the sole beneficiary and is more than 10 years younger than you, a different IRS table produces a lower RMD. Additional calculation guidance is available through IRS Publication 590-B. Review your specific situation with a financial advisor before making any withdrawal decisions.

Editor’s note: This pass added context on the “two RMDs in one year” risk created by deferring a first distribution to April 1, noted that QCDs cannot be directed to donor-advised funds or private foundations, and clarified that the IRS issued final regulations on the Roth catch-up requirement in September 2025. The one-time split-interest QCD limit was also updated to reflect the 2026 inflation-adjusted figure of $55,000.

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