Required Minimum Distributions, commonly called RMDs, are mandatory annual withdrawals the IRS requires from most retirement accounts once you reach a certain age. Understanding how RMDs work is essential for retirement planning because they affect your tax situation, Social Security benefits, Medicare premiums, and estate plans. Here is a complete guide to RMDs in 2026.
What Is an RMD?
When you contribute to a traditional IRA, 401(k), 403(b), or similar pre-tax retirement account, you defer taxes on that money until you withdraw it. The IRS allows this tax deferral to encourage retirement savings — but it eventually requires you to start taking withdrawals so it can collect those deferred taxes. That mandatory annual withdrawal is the RMD.
The amount you must withdraw each year is calculated by dividing your account balance at the end of the prior year by a life expectancy factor from IRS actuarial tables. The older you are, the larger the percentage you must withdraw.
When Must You Start Taking RMDs?
Under the SECURE Act 2.0 (passed in 2022), the required beginning date for RMDs was updated:
- If you were born in 1951 or later, you must begin taking RMDs at age 73.
- If you were born in 1960 or later, the starting age increases to 75 (effective for those reaching 75 after January 1, 2033).
Your first RMD must be taken by April 1 of the year after you reach the applicable starting age. All subsequent RMDs must be taken by December 31 of each year. If you delay your first RMD to April 1, you will have two RMDs in that second year — one for the prior year (delayed first RMD) and one for the current year — which could push you into a higher tax bracket.
Which Accounts Are Subject to RMDs?
RMDs apply to:
- Traditional IRAs
- Rollover IRAs
- SEP IRAs
- SIMPLE IRAs
- 401(k) plans
- 403(b) plans
- 457(b) plans (for governmental employers)
- Profit-sharing plans
- Inherited IRAs (special rules apply — see below)
Roth IRAs are NOT subject to RMDs during the original owner’s lifetime. This is one of the major advantages of Roth accounts for people who want to preserve wealth for heirs or reduce required taxable distributions in retirement.
How Is the RMD Amount Calculated?
The basic formula is:
RMD = Prior December 31 account balance / Distribution period from IRS Uniform Lifetime Table
The IRS Uniform Lifetime Table assigns a distribution period based on your age. In 2022, the IRS updated these tables to reflect longer life expectancies, which effectively reduced RMDs slightly for most people.
Example: You turn 75 in 2026. Your traditional IRA balance on December 31, 2025 was $500,000. The IRS distribution period for age 75 is 24.6 years.
$500,000 / 24.6 = $20,325 — that is your 2026 RMD.
If your sole beneficiary is a spouse who is more than 10 years younger than you, you use the Joint Life and Last Survivor Expectancy Table instead, which produces lower RMDs.
If you have multiple IRAs, you calculate the RMD separately for each account but can take the total from any one or combination of your IRAs. For 401(k) plans, each plan’s RMD must be taken from that specific plan — you cannot aggregate across different 401(k) accounts.
Tax Treatment of RMDs
RMDs from pre-tax accounts are included in your gross income as ordinary income in the year taken. They are taxed at your ordinary income tax rate — the same rate as wages or salary. This can have several downstream effects:
- Higher tax bracket: RMDs can push you into a higher marginal tax bracket, especially if combined with other income.
- Social Security taxation: Up to 85% of Social Security benefits can be taxed if your combined income (including RMDs) exceeds certain thresholds.
- Medicare IRMAA surcharges: RMDs that push your MAGI above Medicare IRMAA thresholds will increase your Medicare Part B and Part D premiums the following year. In 2026, IRMAA surcharges can add hundreds of dollars per month to Medicare costs for high-income retirees.
What Happens If You Miss an RMD?
The penalty for failing to take a required RMD was historically 50% of the amount not taken. The SECURE Act 2.0 reduced this penalty to 25% — and further reduced it to 10% if you correct the mistake within a two-year correction window. While lower than before, the penalty is still significant. Always take your full RMD by the deadline.
Strategies to Manage RMDs
Roth Conversions Before RMDs Begin
One of the most effective strategies to reduce future RMDs is to convert pre-tax traditional IRA or 401(k) money to a Roth IRA before your RMDs begin. Roth IRAs are not subject to RMDs, so each dollar converted reduces your future mandatory withdrawal base and its associated tax.
Qualified Charitable Distributions (QCDs)
If you are 70½ or older and charitably inclined, a Qualified Charitable Distribution allows you to transfer up to $105,000 per year (2026 limit, indexed for inflation) directly from your IRA to a qualified charity. The QCD counts as your RMD but is excluded from your taxable income — unlike a regular IRA withdrawal followed by a charitable deduction. This is particularly valuable because it reduces your MAGI without requiring you to itemize deductions.
Work Longer
If you are still working for your current employer at age 73 (and do not own more than 5% of the company), you may be able to delay RMDs from your current employer’s 401(k) until you retire. This does not apply to IRAs or former employer 401(k)s.
Spend RMDs Strategically
RMDs taken but not needed for living expenses can be reinvested in a taxable brokerage account. While you cannot put them back into an IRA (unless you are still eligible to contribute), you can use them to continue building wealth in a taxable account that will receive a step-up in cost basis at death.
RMDs for Inherited IRAs
The SECURE Act changed the rules for inherited IRAs significantly. For most non-spouse beneficiaries who inherited after January 1, 2020:
- They must withdraw the entire inherited IRA within 10 years of the original owner’s death.
- There are no annual RMD requirements within the 10-year window (for accounts inherited from owners who had not yet begun RMDs) — just a full withdrawal by December 31 of the 10th year after death.
- Eligible Designated Beneficiaries (surviving spouses, minor children, disabled or chronically ill individuals, and beneficiaries not more than 10 years younger than the deceased) have more flexibility and may stretch distributions over their lifetime.
Note: IRS guidance on the 10-year rule has been complex and evolving. Consult a financial advisor or tax professional for guidance specific to your inherited account situation.
RMDs and Estate Planning
Large pre-tax retirement accounts can create significant tax burdens for heirs under the 10-year rule. Strategies to consider:
- Convert pre-tax IRAs to Roth IRAs during your lifetime to reduce the tax burden on heirs.
- Leave Roth IRAs to heirs (tax-free withdrawals) and use pre-tax accounts for charitable giving through QCDs.
- Name a charity as beneficiary of pre-tax accounts — charities do not pay income tax on inherited IRAs.
Final Thoughts
RMDs are one of the most important considerations in retirement planning, yet many people do not plan for them until they are already required. Starting to think about RMDs in your 50s and 60s — while you still have time to use Roth conversions, QCDs, and asset location strategies — can meaningfully reduce the tax impact in retirement. Consult a financial planner or CPA to model how RMDs will interact with your other income sources and develop a withdrawal strategy that minimizes your lifetime tax burden.