Required Minimum Distribution (RMD) Guide 2026: Start Age 73, How to Calculate, and the 25% Penalty

The first thing to understand about RMDs

If you have spent decades building a 401(k) or Traditional IRA, the Required Minimum Distribution (RMD) can feel like a bill that arrives out of nowhere. After years of letting money grow tax-deferred, the IRS eventually says, in effect, “Now you must pull a set amount out every year and pay the tax.” The whole idea fits in one sentence: tax deferral does not last forever, and at a fixed age the withdrawals become mandatory.

Here is the bottom line up front. RMDs look intimidating, but you can avoid nearly every costly mistake by nailing three things: what age you personally must start, which accounts count and how much you must take out, and how to minimize the penalty if you ever slip up. This guide is organized around those three pillars.

The reason people get burned is simple. Miss a required withdrawal, even briefly, and a heavy 25% penalty attaches to the shortfall. Know the rules well, however, and tools like Qualified Charitable Distributions and smart timing can meaningfully shrink the tax bite on the same account. One caveat: this is an explanation of how the rules work, not personalized tax advice for your situation. The obligation follows the account, not your zip code, so it matters for Americans abroad and anyone who accumulated a 401(k) or IRA in the U.S. before moving on.

👉 If you also run a business or have pass-through income, the QBI 20% Deduction Pass-Through Tax Guide 2026 pairs well with this piece for a fuller retirement-and-income picture.

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What age do I actually have to start RMDs?

The single most confusing part of RMDs is the starting age, because it has moved in steps across two recent laws. The old start age of 70.5 became 72 under the original SECURE Act (2019), then 73 under SECURE Act 2.0 (2022), and it rises to 75 in the future. Your correct start age therefore depends entirely on your birth year, so find yours in the table below and pin down the exact year of your first withdrawal.

Birth year	RMD start age	Basis
Before 1951	Already started (70.5 or 72)	Prior rules apply
1951 to 1959	73	SECURE Act 2.0
1960 or later	75	SECURE Act 2.0

That start age carries a wrinkle. The very first RMD gets a special grace period: the RMD for the year you reach your start age can be delayed until April 1 of the following year, a date called the Required Beginning Date (RBD). If you turn 73 in 2026, your first RMD is technically satisfied as long as you take it by April 1, 2027.

The catch is that this delay bunches two years of income into one: you would take the 2026 RMD by April 1, 2027, and the 2027 RMD by December 31, 2027. Two distributions in a single tax year can push you into a higher bracket, which is why many advisors recommend taking the first RMD in the year you reach your start age instead.

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Which accounts trigger RMDs, and which are exempt?

Not every retirement account is subject to RMDs. The accounts that trigger them are generally pre-tax accounts, money you have never paid income tax on, while Roth accounts are largely exempt during the owner’s lifetime. This distinction prevents both unnecessary withdrawals and dangerous omissions.

Account type	RMD during owner’s life	Notes
Traditional IRA	Yes	Required every year from start age
SEP IRA and SIMPLE IRA	Yes	Treated like a Traditional IRA
401(k), 403(b), 457(b)	Yes	Still-working exception may apply
Roth IRA	No	No RMD during the owner’s life
Roth 401(k)	No (from 2024)	Lifetime RMD eliminated in 2024

Two points deserve emphasis. First, a Roth IRA has no RMD at all while the owner is alive. Converting pre-tax dollars to a Roth before retirement can free you from forced withdrawals and the tax pressure they bring later on. Second, Roth 401(k) accounts lost their lifetime RMD requirement starting in 2024. Before that change, a common move was to roll a Roth 401(k) into a Roth IRA at retirement purely to escape RMDs. That headache is gone, though rolling over can still make sense for consolidation, fees, or investment choice.

The 401(k) world also has a still-working exception. If the plan belongs to your current employer and you own less than 5% of the company, you can defer RMDs from that plan until you actually retire. But it applies only to your current employer’s plan. A 401(k) left behind at a former job, and every Traditional IRA you own, must still distribute on the normal schedule.

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How is the RMD amount calculated exactly?

The formula is surprisingly simple: prior-year December 31 balance divided by your age-based factor equals that year’s RMD. The factor comes from the IRS Uniform Lifetime Table. As you get older the factor shrinks, and a smaller divisor produces a larger RMD, so the percentage you must withdraw climbs steadily with age.

For example, say the factor for a 73-year-old is roughly 26.5. If your Traditional IRA balance on the prior December 31 was $1,000,000, your RMD is $1,000,000 ÷ 26.5 ≈ $37,736. You must withdraw at least that much; you can take more, but the extra does not carry forward to next year.

There is one meaningful exception. If your spouse is more than 10 years younger than you and is the sole beneficiary of the account, you use the Joint Life and Last Survivor Table instead. Its factors are larger, so the resulting RMD is smaller, which favors couples with a wide age gap.

Item	Detail
Numerator	Account balance on prior December 31
Denominator (factor)	Uniform Lifetime Table value for your age
Exception table	Spouse 10+ years younger and sole beneficiary → Joint Life Table
Multiple accounts	IRAs can be aggregated; 401(k)s cannot
Rollover status	RMD amounts cannot be rolled over or converted

A frequently missed detail is order of operations: you must satisfy the RMD before any Roth conversion or rollover. RMD dollars are never eligible for rollover. Roll an entire account over without first taking that year’s RMD and the rolled RMD is treated as an excess contribution, a fresh problem to unwind.

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What are the aggregation rules for multiple accounts?

When you hold several retirement accounts, the aggregation rules are where people slip most often. In one line: IRAs can be aggregated and satisfied from any single IRA, but each 401(k) must distribute its own RMD separately.

Concretely, if you own three Traditional IRAs, you calculate each account’s RMD, add them into a single total, and withdraw that total from any one of the three accounts. You could drain one IRA and leave the others untouched; as long as the aggregate is met, you have complied. That flexibility lets you clean out an underperforming account first, or reserve a specific IRA for charitable giving through a QCD.

Employer plans such as 401(k)s and 403(b)s do not offer that flexibility. If you have two 401(k)s, you compute each plan’s RMD separately and withdraw from each individually. You cannot take a double distribution from one to cover the other, and you cannot combine IRA and 401(k) totals at all; they are entirely separate buckets.

Because of this, a common piece of pre-retirement housekeeping is to roll several old-employer 401(k)s into a single IRA, collapsing your RMD calculation into one simple aggregation rule. Just remember the sequence: before rolling a 401(k) over, first take that plan’s RMD for the year.

👉 If you are also unwinding a U.S. brokerage account and worried about capital gains, the capital gains tax filing guide covers the core mechanics.

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How heavy is the penalty if I miss an RMD?

The scariest part of the RMD regime is the penalty for missing one. Historically the excise tax on a shortfall was a punishing 50%. SECURE Act 2.0 cut that to 25%, and it drops further to 10% if you fix the mistake within the allowed window. It is still a steep penalty, so the moment you realize you missed one, the priority is to correct it fast.

Situation	Penalty (excise tax)	Condition
Missed or short RMD	25% of the shortfall	Base penalty
Corrected in time	10% of the shortfall	Take the shortfall within ~2 years + file Form 5329
Reasonable-cause waiver	Possible full waiver	If the IRS accepts the cause

To earn the reduced penalty you must do two things: actually withdraw the amount you fell short by, even if late, and report the shortfall and correction on Form 5329. SECURE Act 2.0’s “correction window” means that correcting the miss generally within two years of when the tax would apply drops you from 25% to 10%.

If you have reasonable cause, you can request a full waiver. Examples include a financial institution’s error, serious illness, or inaccurate guidance you relied on. Even then, you take the missed amount and explain the cause on Form 5329; the waiver is not automatic.

The surest way to avoid the penalty is never to miss. Many brokerages and banks offer automatic RMD withdrawal services; set the calculated RMD to distribute on a fixed date each year and you remove the risk of a busy December slipping past you.

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How do QCDs cut the tax bill?

Because an RMD is taxed as ordinary income the moment it leaves the account, the Qualified Charitable Distribution (QCD) is one of the strongest tools for charitably inclined retirees. A QCD lets someone 70.5 or older transfer money directly from an IRA to a qualified charity; the transfer counts toward the RMD while being excluded entirely from taxable income.

If you instead take your RMD the normal way and then donate the cash, the withdrawal first lands in your income, and you must separately claim the gift as an itemized deduction, so anyone taking the standard deduction may get no charitable benefit at all. A QCD sidesteps this: because it never enters income, the tax advantage survives either way.

The annual QCD limit is inflation-indexed, nudging up each year and sitting in the six-figure range, and a married couple can each use their own limit. For higher-income retirees at risk of pushing into Social Security taxation or a Medicare premium (IRMAA) tier, a QCD is a precise way to offset the income bump the RMD would otherwise cause.

A couple of guardrails: QCDs are only available from IRAs, and the money must go directly to the charity. If you receive it first and then donate, it no longer qualifies. Keep the charity’s acknowledgment on file.

👉 If you are building retirement cash flow from dividends rather than forced sales, see the SCHD dividend ETF guide 2026 for an income-first approach.

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How does the inherited-IRA 10-year rule interact with RMDs?

RMD rules reach their most tangled point with inherited accounts. When the SECURE Act largely ended the old “stretch IRA” at the close of 2019, most non-spouse beneficiaries who inherit an IRA from an owner who died in 2020 or later became subject to the “10-year rule”: empty the inherited account by the end of the tenth year after the death.

Here is where many beneficiaries get tripped up. Does the 10-year rule mean “withdraw whenever you want across 10 years,” or “take something every year”? It depends on whether the deceased had already begun their own RMDs. If the original owner had started RMDs, the beneficiary must take annual RMDs in years one through nine plus empty the account by year 10. If the owner died before their start age, there are no interim withdrawals; the account just has to be empty by year 10.

Surviving spouses get more favorable choices. A spouse can roll the inherited IRA into their own account (a spousal rollover) and follow their own RMD rules, escaping the 10-year clock. A handful of other “eligible designated beneficiaries,” such as disabled or chronically ill individuals and minor children, also qualify for exceptions.

The practical implication is significant. A beneficiary still in peak earning years should spread withdrawals across the decade to manage their bracket rather than take a lump at the end; concentrating distributions in lower-income years can swing the total tax owed dramatically.

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What mistakes do people make most with RMDs?

Put all the rules together and the recurring mistakes come into focus. Knowing them in advance lets you dodge expensive penalties and wasted tax dollars.

First, casually using the first-year delay and doubling up on income. Pushing the first RMD to April 1 of the following year stacks two RMDs into one tax year, spiking taxable income and often the bracket. Absent a specific reason, take the first RMD in the year you reach your start age.

Second, treating 401(k)s like IRAs on aggregation. Pull the combined RMD for several 401(k)s from a single plan and the others sit unsatisfied, exposing you to the penalty. The IRA’s aggregation flexibility is not the 401(k)‘s per-plan requirement.

Third, doing a Roth conversion or rollover before satisfying the RMD. Because RMD dollars are not eligible for conversion, take the year’s RMD first and convert only what remains. Reverse the order and you create an excess-contribution headache.

Fourth, overlooking money-saving tools like the spousal age-gap exception or QCDs. A spouse more than 10 years younger reduces your RMD via the Joint Life Table, and charitable intent can lower income through a QCD.

Finally, RMDs are calculated on the prior-year-end balance even in a down market, so in a year the account drops sharply the effective withdrawal rate feels larger. In those years, distributing cash or short-term holdings first can help you avoid locking in losses.

👉 If you are rethinking your growth-asset allocation in retirement, the AI stocks investment guide 2026 is a useful gut check on how much growth exposure to keep.

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Further reading

• 👉 QBI 20% Deduction Pass-Through Tax Guide 2026: eligibility, SSTB, planning
• 👉 Capital Gains Tax Filing Guide: strategy and practical steps
• 👉 SCHD Dividend ETF Guide 2026: building retirement cash flow
• 👉 AI Stocks Investment Guide 2026: core names and ETF selection

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This article is for general information only and is not tax, legal, or investment advice. RMD rules vary with your birth year, account types, marital and inheritance situation, and the latest IRS guidance. Before withdrawing or filing, consult a CPA, tax professional, or registered financial planner about your specific circumstances.