Required Minimum Distributions – The IRS Loves When You Turn 73

An RMD is the minimum amount the IRS requires you to withdraw each year from traditional IRAs, 401(k)s, 403(b)s, and similar pre-tax retirement accounts. Because contributions and earnings were never taxed, the government eventually mandates withdrawals so it can collect. The amount is calculated by dividing your prior year-end account balance by a life-expectancy factor from the IRS Uniform Lifetime Table.

Under SECURE 2.0, the starting age depends on your birth year. If you were born between 1951 and 1959, your first RMD year is the year you turn 73. If you were born in 1960 or later, RMDs don’t begin until age 75, effective 2033. Your first RMD must be taken by April 1 of the following year; all subsequent RMDs are due by December 31 each year.

Divide your account balance as of December 31 of the prior year by the distribution period that corresponds to your age in the IRS Uniform Lifetime Table. For example, at age 73 the period is 26.5 years, so a $500,000 balance produces an RMD of about $18,868. Most IRA custodians will calculate this for you, but it remains your legal responsibility to withdraw the correct amount.

A missed RMD triggers a 25% excise tax on the amount that wasn’t withdrawn. If you catch the error promptly, take the missed distribution, and file IRS Form 5329 with a letter of explanation, the penalty may be reduced to 10%. Either way, the shortfall itself is still taxable income when you withdraw it.

No. Roth IRAs are not subject to RMDs during the account owner’s lifetime, because contributions are made with after-tax dollars. Growth and qualified distributions are tax-free. This makes Roth IRAs a powerful tool for minimizing lifetime taxes and for estate planning. Note that Roth 401(k) and Roth 403(b) plans are also now RMD-free beginning in 2025, thanks to SECURE 2.0.

Yes. A QCD is a direct transfer from your IRA to a qualified charity. It counts toward your RMD but is excluded from your taxable income — a meaningful advantage over taking the RMD and then donating separately. For 2026, individuals age 70½ or older can direct up to $111,000 per year to charity this way.

For traditional IRAs, yes, you must calculate the RMD separately for each IRA, but you can satisfy the combined total by withdrawing from one or a combination of accounts. The same rule applies to 403(b) plans. 401(k) plans are different: each must have its own RMD taken separately, which is another reason to consider consolidating old 401(k)s into an IRA when appropriate.

Yes. Converting traditional IRA funds to a Roth IRA reduces the pre-tax balance that RMDs are calculated on. While the conversion itself is a taxable event in the year it’s done, it permanently removes that money from the RMD equation. The best window is typically the years between retirement and age 73, when income may be lower.

Medicare Part B and D premiums are determined by your income from two years prior (the IRMAA lookback). A large RMD in 2026 could trigger higher Medicare premiums in 2028. This is one of the most commonly overlooked RMD side effects. Planning your withdrawal strategy, including Roth conversions and QCDs, can help manage your income relative to IRMAA thresholds.

Surviving spouses have the most flexibility and can treat an inherited IRA as their own. Most other (non-spouse) beneficiaries must distribute the entire account within 10 years of the original owner’s death. Under IRS guidance, if the original owner had already begun taking RMDs, beneficiaries may also be required to take annual distributions during that 10-year window, dramatically accelerating the tax bill compared to the old “stretch IRA” approach. Consult a CFP® before making any distribution decisions from an inherited account.