At 73 the IRS Will Only Ask Him for 3.65% of the IRA. The Table It Uses Will Give Him 27 More Years to Empty It, and That’s Why Most of the Money Will Never Have to Leave
The IRS table that governs your first required IRA withdrawal was designed with a built-in feature that keeps most of your money untouched, and understanding how that factor works changes every retirement withdrawal decision you make after 73.
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If you own a traditional IRA and turn 73 this year, the IRS now requires an annual withdrawal called a required minimum distribution (RMD). The rule that sets the RMD at 73 asks for less than most retirees expect. The IRS Uniform Lifetime Table sets the first withdrawal at about 3.77% of the account. Because the table resets every year, the formula never forces the IRA to zero while you are alive.
How a 26.5 Divisor Keeps Most of Your IRA Invested
Your RMD equals the IRA balance on December 31 of the prior year divided by a “distribution period” from the table. At age 73, that factor is 26.5. On a $500,000 IRA, that makes the first RMD about $18,868. The factor looks like a countdown of about 27 years. In practice, you look up a new factor each year at your new age, and it decreases slowly.
At 80 it is 20.2, or about 4.95%. At 90 it is 12.2, or about 8.2%. At 100 it is still 6.4, so the IRS asks for about 15.6%. The required share is always a fraction of what remains, so the account never runs out on schedule. In any year your investments earn more than the required percentage, the balance can end the year higher than it started.
Some charts list 27.4, or 3.65%, at age 73. Under current regulations, 27.4 sits on the age-72 row, and 73-year-olds use 26.5.
Where the IRS Wrote This Down
The factor comes from Treasury Regulation §1.401(a)(9)-9(c), the Uniform Lifetime Table. That regulation carries out Internal Revenue Code §401(a)(9), which applies to IRAs through §408(a)(6). The table is built for an owner whose spouse either isn’t the only beneficiary or is no more than 10 years younger, and that design makes it generous. The Single Life Table in the same regulation gives a 73-year-old a factor of just 16.4, which works out to about 6.1%. The SECURE 2.0 Act raised the RMD starting age to 73 and calls for a further increase to age 75 in 2033.
Who Qualifies for the Smaller Withdrawals
- Covered: Owners of traditional, SEP, and SIMPLE IRAs who reach 73, whether or not they name a beneficiary.
- Even smaller RMDs: Owners whose spouse is more than 10 years younger and is the only beneficiary. They use the Joint and Last Survivor Table instead, which has a larger factor.
- Excluded: People with inherited IRAs, who follow separate beneficiary rules.
- Not required to withdraw: Original owners of Roth IRAs, who take no lifetime RMDs.
Running Your 2026 Numbers in Five Steps
- Pull the December 31, 2025 balance for each traditional IRA you own.
- Divide each balance by the factor for the age you reach in 2026. At 73, that factor is 26.5.
- Add the results together. The IRS lets you take the combined total from any one IRA or spread it across several. 401(k) RMDs must be calculated and withdrawn separately for each plan.
- Withdraw that amount by December 31. Your first RMD can wait until April 1 of the following year.
- Leave the rest invested. Repeat each year with the new factor and the new year-end balance.
Deadlines and Penalties to Plan Around
Waiting until April 1 for your first RMD comes at a cost. You still owe the second RMD by December 31 of that same year. Two taxable withdrawals land on one return. That can push you into a higher tax bracket and raise income-based costs such as Medicare premiums.
Missing an RMD triggers a 25% penalty tax on the shortfall. SECURE 2.0 cut that from 50%, effective for 2023. The tax falls to 10% if you fix the shortfall within the two-year correction window.
Money left in the IRA still faces income tax eventually. Most non-spouse heirs must empty an inherited IRA by the end of the 10th year after the owner’s death. A small balance during your lifetime can become a large, quick withdrawal for your heirs (we walked through how to reduce that bill before required withdrawals begin in a free guide on the first-year tax bomb). Plan for that by year 2033, when the starting age moves to 75 and the math changes for younger savers.
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David Beren has been a Flywheel Publishing contributor since 2022. Writing for 24/7 Wall St. since 2023, David loves to write about topics of all shapes and sizes. As a technology expert, David focuses heavily on consumer electronics brands, automobiles, and general technology. He has previously written for LifeWire, formerly About.com. As a part-time freelance writer, David’s “day job” has been working on and leading social media for multiple Fortune 100 brands. David loves the flexibility of this field and its ability to reach customers exactly where they like to spend their time. Additionally, David previously published his own blog, TmoNews.com, which reached 3 million readers in its first year. In addition to freelance and social media work, David loves to spend time with his family and children and relive the glory days of video game consoles by playing any retro game console he can get his hands on.
