Quick Answer

Required Minimum Distributions (RMDs) are mandatory annual withdrawals the IRS requires from pre-tax retirement accounts (Traditional IRAs, 401(k)s, 403(b)s, SEP IRAs) once you reach age 73 (born 1951–1959) or age 75 (born 1960+). Your annual RMD equals your December 31 prior-year balance divided by your IRS life expectancy factor (e.g., factor of 26.5 at age 73).

Retirement accounts give workers decades of valuable tax deferral, but the money cannot stay untaxed forever. Once you reach your statutory starting age under federal law, the IRS requires you to start withdrawing a minimum portion of your savings every year. Figuring out which accounts require distributions, calculating the exact dollar amounts from official IRS tables, and avoiding severe excise tax penalties can feel overwhelming. We examined official IRS publications, statutory federal tax codes, and Treasury regulations to provide a clear, step-by-step plan for handling your distributions with confidence.

What This Article Covers:

  • What are Required Minimum Distributions (RMDs): How the federal mandate works and why it exists.
  • When RMDs begin in 2026: Exact starting ages under the SECURE 2.0 Act based on your birth year.
  • How to calculate your distribution: Step-by-step math using official IRS Uniform Lifetime tables.
  • Account rules compared: Traditional IRAs, 401(k)s, Roth IRAs, annuities, and Health Savings Accounts (HSAs).
  • Tax withholding & penalty avoidance: How to protect your income from the 25% excise tax and prevent unexpected tax bills.

Understanding Required Minimum Distributions: What the Official Rules Actually Say

Under 26 U.S. Code § 401(a)(9) and IRS Publication 590-B, a Required Minimum Distribution is the minimum annual dollar amount that an account owner must withdraw from qualified, tax-deferred retirement plans.

When you contributed to a traditional 401(k) or deducted traditional IRA contributions during your working career, you postponed paying federal and state income taxes on both the principal and the investment earnings. The RMD mandate is the mechanism through which the federal government ensures that this deferred income is eventually recognized and taxed during your retirement years.

To calculate an annual distribution, the IRS requires you to use your account balance on December 31 of the previous calendar year and divide that balance by a distribution period (life expectancy divisor) found in IRS life expectancy tables.

A Concrete Calculation Example:

Consider a retiree who turns age 74 in 2026. Her traditional IRA ending balance on December 31, 2025 was $350,000.

  • Step 1: Look up age 74 in the IRS Uniform Lifetime Table (Table III) → The divisor is 25.5.
  • Step 2: Divide the balance by the divisor: $350,000 ÷ 25.5 = $13,725.49.
  • Step 3: The retiree must withdraw at least $13,726 by December 31, 2026.

You can calculate your own customized distribution in seconds with our free RMD Calculator by Age.

The Plain English Version:

  • RMDs are mandatory annual withdrawals from pre-tax retirement accounts required by the IRS.
  • They start at age 73 for retirees born between 1951 and 1959, and age 75 for those born in 1960 or later.
  • The withdrawal amount is calculated using your account balance from December 31 of the previous year.
  • Every distributed dollar is taxed as ordinary income at your regular federal and state tax rates.
  • Missing the December 31 deadline triggers an IRS excise penalty of up to 25% on the shortfall.

Who This Applies To: Account-by-Account Eligibility Rules

Not all retirement and savings vehicles follow the same distribution rules. The IRS treats different tax structures with distinct statutory requirements:

Traditional IRAs, SEP IRAs & SIMPLE IRAs: Yes

All traditional pre-tax IRAs are subject to annual RMD rules once you reach age 73 or 75. If you own multiple traditional, SEP, or SIMPLE IRAs, the IRS allows account aggregation: you calculate the RMD for each IRA separately based on each account’s December 31 balance, add the totals together, and withdraw the full combined sum from any single IRA or combination of IRAs you choose.

Employer 401(k), 403(b) & 457(b) Plans: Yes (With No Cross-Plan Aggregation)

Traditional employer-sponsored defined-contribution plans require mandatory annual distributions. However, 401(k) plans cannot be aggregated across different employers or combined with IRAs. If you hold three separate 401(k) accounts from former employers, each plan must calculate and distribute its own separate RMD check. For 403(b) plans, aggregation is permitted only among other 403(b) accounts you own.

Roth IRAs: No (100% Exempt During Lifetime)

Under 26 U.S. Code § 408A, original owners of Roth IRAs are completely exempt from required minimum distributions for their entire lifetime. Because Roth contributions were made with after-tax dollars and qualified earnings are tax-free, the IRS does not require mandatory distributions. Many retirees use our Roth Conversion Calculator to convert traditional balances before age 73 to permanently reduce future RMD obligations.

Designated Roth 401(k) & Roth 403(b) Accounts: No (SECURE 2.0 Change)

Prior to 2024, designated Roth accounts inside employer 401(k) plans were subject to RMDs unless rolled over into a Roth IRA. Under Section 325 of the SECURE 2.0 Act, designated Roth 401(k) and Roth 403(b) accounts are permanently exempt from lifetime RMD requirements starting in tax year 2024 and beyond.

Commercial & Retirement Annuities: It Depends

If an annuity is held inside a qualified retirement plan (such as an IRA annuity or 401(k) annuity), it is subject to standard RMD rules. However, non-qualified annuities purchased with after-tax money outside of a retirement plan are not subject to IRS RMD rules, though they follow their own contract surrender and annuitization terms.

Health Savings Accounts (HSAs): No

Health Savings Accounts (HSAs) are medical savings vehicles, not retirement plans under IRC § 401. HSAs are never subject to required minimum distributions at any age. Balances can remain invested and grow indefinitely.

Inherited IRAs: Yes (SECURE Act 10-Year Rule)

For non-spouse beneficiaries who inherited a traditional IRA from someone who passed away in 2020 or later, the account must be fully emptied by December 31 of the 10th year following death. Under IRS Treasury Decision 10001 (July 2024), if the original owner died on or after their required beginning date, annual distributions are also required during years 1 through 9.

The Numbers: Official 2026 RMD Tables, Starting Ages, and Calculations

The table below outlines the official IRS Uniform Lifetime Table III factors from IRS Publication 590-B (Treasury Decision 9968). These factors apply for calculating 2026 distributions and show the exact percentage of your December 31, 2025 balance that must be distributed at each age:

Age in 2026 IRS Life Factor Mandatory Withdrawal % RMD on $200,000 RMD on $500,000 RMD on $1,000,000
7326.53.77%$7,547$18,868$37,736
7425.53.92%$7,843$19,608$39,216
7524.64.07%$8,130$20,325$40,650
7623.74.22%$8,439$21,097$42,194
7722.94.37%$8,734$21,834$43,668
7822.04.55%$9,091$22,727$45,455
7921.14.74%$9,479$23,697$47,393
8020.24.95%$9,901$24,752$49,505
8516.06.25%$12,500$31,250$62,500
9012.28.20%$16,393$40,984$81,967

SECURE 2.0 Starting Age by Birth Year:

  • Born in 1950 or earlier: Subject to prior starting ages (70½ or 72); distributions must continue annually.
  • Born between 1951 and 1959: Starting age is 73. Your first distribution year is the calendar year you reach 73.
  • Born in 1960 or later: Starting age is 75 under SECURE 2.0 § 107.

What Most Sources Don’t Tell You: The Research Finding

When we analyzed IRS audit procedures and Treasury Inspector General for Tax Administration (TIGTA) reports regarding retirement compliance, three critical realities emerged that are rarely discussed in basic financial summaries:

  1. Custodian Calculation Disclaimers: Many retirees assume that their brokerage or bank is legally responsible for calculating the correct RMD. In reality, account agreements universally state that the legal responsibility for calculating and withdrawing the correct amount rests entirely on the taxpayer. When custodians make calculation errors—especially on accounts holding non-liquid assets or recent transfers—the IRS assesses the excise penalty against the individual account owner.
  2. The “First-Year Extension” Double-Tax Trap: The IRS allows you to delay your very first RMD until April 1 of the year following the year you turn 73. However, doing so requires you to take your second RMD by December 31 of that same year. Stacking two full RMDs into a single 12-month period often pushes retirees into a higher federal tax bracket and spikes Modified Adjusted Gross Income (MAGI), which can trigger costly Medicare Part B and Part D IRMAA surcharges two years later.
  3. Withholding as a Strategy for Estimated Taxes: Under Treasury regulations, tax withheld from retirement distributions is treated as paid evenly throughout the tax year, regardless of the date the distribution occurs. If you forgot to make quarterly estimated tax payments earlier in the year, electing federal tax withholding on an RMD taken in November or December using IRS Form W-4R retroactively cures estimated tax underpayment penalties.

What You Can Do: Specific Action Steps to Protect Your Savings

  1. Locate your prior-year statements: Retrieve the official December 31, 2025 ending balance for all traditional IRAs, SEP IRAs, SIMPLE IRAs, and employer 401(k) plans.
  2. Calculate your exact RMD: Use our free RMD Calculator by Age to determine your mandatory distribution amount and monthly breakdown.
  3. Elect proper tax withholding: Submit IRS Form W-4R to your custodian with your chosen withholding percentage (e.g., 12%, 22%, or custom rate). Model your net cash and withholding balance with our Retirement Tax Withholding Calculator.
  4. Evaluate Social Security tax impact: Review how your RMD income interacts with your benefits using the Social Security Tax Calculator to see if your benefits cross the 50% or 85% taxable thresholds.
  5. Schedule distributions by November 15: Submit distribution paperwork well ahead of the December 31 deadline to avoid year-end custodian processing delays.
  6. If you missed an RMD: Take the corrective distribution immediately and file IRS Form 5329 with your tax return to report the reasonable cause and request penalty abatement under IRS relief guidelines.
  7. Consult a local SHIP counselor or fiduciary tax professional: If you need assistance coordinating retirement income, connect with your State Health Insurance Assistance Program (SHIP) at shiphelp.org for healthcare threshold counseling or a licensed CPA.

Common Questions: Frequently Asked Questions About RMDs

What are required minimum distributions (RMDs)?

Required minimum distributions (RMDs) are mandatory annual withdrawals that the IRS requires you to take from tax-deferred retirement accounts—including Traditional IRAs, 401(k)s, 403(b)s, and SEP IRAs—once you reach your statutory starting age (age 73 or 75 under SECURE 2.0).

At what age do required minimum distributions start in 2026?

In 2026, required minimum distributions start at age 73 for anyone born between 1951 and 1959. For individuals born in 1960 or later, RMDs begin at age 75. Anyone born in 1950 or earlier already reached their starting age under prior law.

How are required minimum distributions calculated?

You calculate your RMD by taking your account balance on December 31 of the previous year and dividing it by your life expectancy factor from IRS Publication 590-B (Uniform Lifetime Table III). For example, at age 73, the factor is 26.5.

Are required minimum distributions taxable as ordinary income?

Yes. Every dollar of an RMD from a traditional pre-tax retirement account is taxed as ordinary income at your federal and state marginal tax rates. RMD withdrawals do not qualify for lower long-term capital gains rates.

Do 401(k) plans have required minimum distributions?

Yes. Traditional 401(k) plans require annual RMDs starting at age 73 or 75. Unlike IRAs, each 401(k) plan must distribute its own separate RMD; you cannot aggregate balances across different employer plans.

Do Roth IRAs have required minimum distributions?

No. Original Roth IRAs have no required minimum distributions during the owner’s lifetime. Under SECURE 2.0 legislation, designated Roth 401(k) and Roth 403(b) accounts are also exempt from lifetime RMDs starting in 2024.

Are annuities subject to required minimum distributions?

It depends on how the annuity was purchased. Annuities held inside a qualified tax-deferred account (like a Traditional IRA or 401(k)) are subject to RMD rules. Non-qualified annuities purchased with after-tax money are not subject to IRS RMD rules.

Do Health Savings Accounts (HSAs) have required minimum distributions?

No. Health Savings Accounts (HSAs) never have required minimum distributions at any age. You can leave funds growing tax-free in an HSA indefinitely or use them tax-free for qualified medical expenses.

When is the deadline to take a required minimum distribution each year?

The annual deadline for taking your RMD is December 31. For your first RMD only (the year you reach age 73 or 75), the IRS allows an extension until April 1 of the following year.

What is the penalty for missing a required minimum distribution?

Failing to withdraw your full RMD by the deadline triggers a 25% IRS excise tax under 26 U.S. Code § 4974. Under SECURE 2.0, this penalty drops to 10% if you correct the shortfall within two years using IRS Form 5329.

State Variations and Individual Circumstances

State Income Tax Treatment of RMDs

While federal RMD rules are uniform across all 50 states, state taxation of retirement distributions varies dramatically:

  • No State Income Tax: States like Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming impose zero state tax on RMD distributions.
  • Full or Partial Senior Exclusions: States like Georgia, Illinois, Mississippi, and Pennsylvania exempt some or all retirement distributions from state taxation once you reach specific age thresholds.
  • Fully Taxable States: Many states treat RMDs as fully taxable ordinary income subject to standard state income tax brackets.

To check the exact tax treatment and senior exemptions for your state, explore our Retirement Tax Calculator by State.

Your RMD Action Checklist

  • [ ] Locate your official December 31, 2025 account balance across all pre-tax retirement accounts.
  • [ ] Verify your SECURE 2.0 starting age (Age 73 for born 1951–1959; Age 75 for born 1960+).
  • [ ] Calculate your exact required minimum distribution using our free RMD Calculator by Age.
  • [ ] Check whether withdrawing from a single IRA or separate 401(k) plans applies to your account types.
  • [ ] Submit withholding instructions on Form W-4R and complete your distribution before December 31.

Sources Used in This Article

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