Required Minimum Distributions (RMDs) – 2026 Rules

For many retirees, Required Minimum Distributions feel like an unwelcome nudge from the IRS: take this money out of your retirement account whether you need it or not, and pay taxes on it. But understanding RMDs thoroughly—the rules, the timing, the planning opportunities—turns them from an obligation into something you can actually work with.

Traditional IRAs, 401(k)s, 403(b)s, SEP-IRAs, and most other tax-deferred retirement accounts were funded with pre-tax dollars that were never taxed. The IRS allowed that tax deferral for decades—but it comes with a condition: you must eventually start taking distributions and paying taxes on them. RMDs are the mechanism that enforces that condition.

Roth IRAs are the notable exception. Because Roth contributions were made with after-tax dollars, no RMDs are required during the owner's lifetime. Roth 401(k)s also no longer require RMDs starting in 2024, thanks to changes under the SECURE 2.0 Act.

Under the SECURE 2.0 Act, the RMD starting age depends on your birth year:

Your first RMD must be taken by April 1 of the year following the year you reach your required beginning age. Every subsequent RMD must be taken by December 31 of that year. Be careful: if you delay your first RMD to April 1, you'll have two RMDs in the same year—which could push you into a higher bracket.

The formula is straightforward: divide the account balance as of December 31 of the prior year by your life expectancy factor from the IRS Uniform Lifetime Table (or Joint Life Table if your sole beneficiary is a spouse more than ten years younger).

Example: If your traditional IRA was worth $500,000 on December 31, 2025, and your life expectancy factor for age 74 is 25.5, your 2026 RMD would be $500,000 ÷ 25.5 = $19,608. Your brokerage or IRA custodian will typically calculate this for you and may offer automatic distribution options.

• Traditional IRAs (including SEP-IRAs and SIMPLE IRAs)

• Traditional 401(k), 403(b), and 457(b) plans

• Roth 401(k) plans (no longer required starting in 2024 under SECURE 2.0)

• Inherited IRAs and inherited Roth IRAs (special rules apply—see below)

Roth IRAs are not subject to RMDs during the original owner's lifetime.

For IRA RMDs, you can aggregate the total RMD across all your traditional IRAs and withdraw the full amount from one or any combination of accounts. This gives you flexibility to take the distribution from whichever account makes strategic sense.

401(k) RMDs cannot be aggregated this way. Each 401(k) must satisfy its own RMD separately. This is one reason many retirees roll old 401(k)s into an IRA—simplifying the RMD process.

If you're still working and participating in your current employer's 401(k) plan, you may be able to delay RMDs from that specific plan until you retire—even past age 73. This exception does not apply to IRAs or to 401(k)s from former employers.

The penalty for failing to take a required RMD is steep: 25% of the amount not withdrawn. (Prior to SECURE 2.0, it was 50%.) The penalty drops to 10% if corrected within two years. Given the IRS's correction relief programs, a missed RMD is usually fixable—but it's far better to never miss one in the first place. Set calendar reminders and automate distributions if possible.

Beneficiaries who inherit an IRA face their own set of RMD rules, which changed significantly with the SECURE Act of 2019 and subsequent regulations. Most non-spouse beneficiaries must now empty inherited IRA accounts within 10 years. Annual RMDs are required during those 10 years if the original owner had already started taking RMDs. Spouses have more flexibility and can treat an inherited IRA as their own. These rules are complex—inherited IRA beneficiaries should consult a tax advisor.

• Roth conversions before RMDs begin can reduce future RMD amounts and the associated tax burden

• Qualified Charitable Distributions (QCDs) allow up to $105,000 per year to go directly from your IRA to charity, satisfying the RMD without the amount appearing as taxable income

• If you don't need RMD income, reinvesting it in a taxable brokerage account (after tax) keeps it working

• Coordinating RMDs with Social Security timing and bracket management can minimize lifetime taxes

RMDs, approached strategically, are not just a tax obligation—they're a planning prompt. Every year they remind you to review your withdrawal strategy, assess your tax situation, and make intentional decisions about your retirement finances.