Once you reach age 73, you are legally required to take Required Minimum Distributions (RMDs) from most tax-deferred retirement accounts. The government uses these mandatory withdrawals to collect taxes on money that has been sheltered from taxation, sometimes for decades. The rules are precise, the deadlines are firm, and the penalties for getting it wrong are steep.
If you are already past 73, or approaching that milestone, understanding exactly how your RMD is calculated is critical. It is also a conversation worth having with a financial advisor before you take your first distribution.
The IRS calculates your RMD with a straightforward formula: divide your total account balance by a life expectancy factor from the agency’s published tables. That factor represents the number of additional years the IRS expects you to live, and it shrinks every year as you age, pushing your required withdrawal gradually higher as a share of your remaining balance.
Here is a concrete example. At age 73, the IRS Uniform Lifetime Table assigns a life expectancy factor of 26.5. If your retirement account balance as of December 31 of the prior year was $250,000, dividing by 26.5 produces a required distribution of roughly $9,434. For the full table, see the IRS Uniform Lifetime Table. As a percentage of balance, RMDs rise steadily with age: roughly 3.7% at 73, about 5% by 80, and around 8% by 90.
The IRS Has Extended the IRA Amendment Deadline Again
If you are managing an inherited retirement account alongside your own RMDs, the regulatory picture has been complicated for several years. The IRS issued Notice 2026-09 (published in Internal Revenue Bulletin 2026-07), extending the deadline for IRA custodians and trustees to amend IRA documents for SECURE Act compliance to December 31, 2027. That extension reflects the fact that the IRS is still developing model amendment language, and custodians need time to act once that language is finalized.
Separately, the 2024 Final Regulations (published July 2024) resolved a long-running ambiguity about the 10-year distribution rule for inherited IRAs. Those regulations confirmed that non-spouse beneficiaries who inherit from an account owner who had already begun taking RMDs must take annual distributions during years one through nine of the 10-year window, rather than simply emptying the account by year ten. That annual-RMD requirement became effective beginning with the 2025 distribution year. Until broader guidance is finalized, the IRS permits taxpayers to apply a reasonable, good-faith interpretation of the existing rules.
Different Rules for RMDs Depending on Your Retirement Account
RMD rules cover a wide range of retirement vehicles. On the employer plan side, they apply to profit-sharing plans, 401(k) plans, 403(b) plans, and 457(b) plans. On the IRA side, they cover traditional IRAs and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs. Roth IRAs and designated Roth accounts remain exempt from RMDs during the original owner’s lifetime, though beneficiaries of those accounts are still subject to distribution requirements.
One significant update from SECURE 2.0: starting in 2024, designated Roth accounts inside employer-sponsored plans, including Roth 401(k), Roth 403(b), and governmental Roth 457(b) plans, became exempt from RMDs during the account owner’s lifetime. Before that change, only Roth IRAs enjoyed that treatment. If you hold Roth money inside a workplace plan, it no longer factors into your RMD calculation.
The aggregation rules differ between account types. With a traditional IRA, you must calculate your RMD for each account separately, but you are permitted to combine those totals and satisfy them all from a single IRA. With a defined contribution plan such as a 401(k), the rules are stricter: each plan requires its own RMD, and you cannot satisfy a 401(k) RMD by pulling money from an IRA. One additional note: if you are still working past age 73, you may generally delay RMDs from your current employer’s plan until you retire. That exception does not apply to anyone who owns 5% or more of the business sponsoring the plan.
There is one additional scenario worth knowing. If your spouse is more than 10 years younger than you and is the sole beneficiary of your account, the IRS requires you to calculate your RMD using a Joint Life Expectancy Table rather than the standard Uniform Lifetime Table. That joint calculation accounts for both your age and your spouse’s age, which typically produces a longer combined life expectancy and a smaller required distribution each year.
Consider a Roth Conversion Before RMDs Begin
The years between retirement and age 73 represent one of the most valuable tax-planning windows available to pre-retirees. With earned income gone, Social Security possibly not yet started, and RMDs still in the future, taxable income is often at its lowest point. Converting a portion of a traditional IRA to a Roth IRA during this gap shrinks the pre-tax balance that will be subject to future RMDs, potentially keeping mandatory distributions in a lower bracket for years afterward.
Every dollar moved to a Roth account is a dollar no longer subject to the annual RMD formula. Roth IRAs carry no lifetime RMD requirement for the original owner, and withdrawals are generally tax-free once the five-year holding period is satisfied. There is no income limit on conversions, and no annual dollar cap, though the converted amount is taxed as ordinary income in the year of conversion. A well-paced multi-year strategy can spread the tax cost across lower-rate years rather than absorbing it all at once. One important caveat: Medicare Part B and Part D premiums are determined by modified adjusted gross income from two years prior through a system called IRMAA, so each conversion amount should be sized to avoid crossing a premium surcharge threshold.
Reduce Your RMD Tax Bill with a QCD
A Qualified Charitable Distribution (QCD) is one of the most effective ways to satisfy an RMD without pushing yourself into a higher tax bracket. If you are age 70 1/2 or older, you can instruct your IRA custodian to transfer money directly to an eligible charity. For 2026, the annual QCD limit is $111,000 per individual (up from $108,000 in 2025), and the amount transferred counts toward satisfying your RMD for the year while being excluded entirely from your adjusted gross income. The funds must flow directly from your IRA custodian to the charity before December 31 to qualify.
As a separate one-time option, SECURE 2.0 also permits a QCD of up to $55,000 in 2026 (up from $54,000 in 2025) to fund a charitable remainder trust or purchase a charitable gift annuity. That $55,000 one-time election counts against your annual $111,000 QCD limit rather than sitting on top of it. Married couples who each hold their own IRA can each make up to $111,000 in regular QCDs annually, for a combined total of $222,000.
QCDs are especially valuable in 2026 because the One Big Beautiful Bill Act, signed into law on July 4, 2025, has reshaped how charitable deductions work for itemizers. Under those new rules, itemizers can only deduct the portion of their charitable contributions that exceeds 0.5% of their adjusted gross income. Taxpayers in the top 37% bracket face an additional restriction: the tax benefit of all itemized deductions is capped at 35 cents per dollar rather than 37 cents. A QCD sidesteps both restrictions entirely because it is an income exclusion, not an itemized deduction. Non-itemizers also gained a new benefit under the OBBBA: single filers can deduct up to $1,000 in cash charitable gifts ($2,000 for married couples filing jointly) without itemizing, though that deduction is far smaller than what a properly structured QCD can deliver.
The Surviving Spouse RMD Advantage
SECURE 2.0 gave widows and widowers a meaningful new option. If you are a surviving spouse and the sole beneficiary of your late partner’s retirement account, you can elect to be treated as the deceased participant for RMD purposes. If your deceased spouse was younger than you, this election lets you delay mandatory distributions until the year your spouse would have turned 73. When distributions do begin, you also get to use the more favorable Uniform Lifetime Table rather than the Single Life Expectancy Table that would otherwise apply to a beneficiary.
Key Rules to Follow with RMDs
First, distributions become mandatory at age 73. Under SECURE 2.0, that starting age rises to 75 beginning in 2033, but only for anyone born in 1960 or later. Those born between 1951 and 1959 remain subject to the age 73 trigger. Those additional two years of tax-deferred growth can compound meaningfully for younger workers who plan ahead now.
Second, your required beginning date is April 1 of the year following the year you turn 73. If you turn 73 in 2025, you have until April 1, 2026, to take your first RMD covering the 2025 tax year. There is a catch: delaying that first distribution until April 2026 means you will also owe a second RMD for 2026 by December 31 of that year. Taking two distributions in a single calendar year can push you into a higher bracket and may trigger IRMAA surcharges on Medicare premiums, so many advisors recommend taking the first RMD before year-end rather than using the April extension.
Third, missing your RMD deadline carries a stiff penalty. The excise tax is 25% of the amount you failed to withdraw, reduced from the previous 50% rate under prior law. SECURE 2.0 added a correction window: if you take the missed distribution within two years, the penalty drops to 10%. A corrective distribution resolves the past shortfall but does not count toward the current year’s RMD requirement.
Fourth, watch out for common calculation errors. Using the wrong year-end account balance is among the most frequent mistakes, and it can result in a distribution that falls short of the required amount. You also need to confirm you are using the correct life expectancy factor for your age and account type, and that you are accounting for every qualifying retirement account you hold.
Fifth, before taking any distribution, consult a financial advisor. Applying the wrong life expectancy factor, missing an account, or withdrawing less than required can all draw unwanted attention from the IRS. Getting it right the first time is far less painful than correcting an error after the fact.
Editor’s note: This article was updated to specify the IRS notice number (Notice 2026-09, published in Internal Revenue Bulletin 2026-07) for the IRA amendment deadline extension to December 31, 2027, and to add a section on Roth conversions as a strategy to reduce future RMD exposure, including context on IRMAA surcharge thresholds. The OBBBA’s signing date of July 4, 2025 was also added, and the two-RMD year warning was expanded to note potential Medicare IRMAA effects.
Contact [email protected] for any questions or corrections.
Top Gaining Stocks
Top Losing Stocks