Required Minimum Distributions (RMD) 2026: Age 73 Rules and How to Avoid the 25% Penalty
By the 3Tej Research Desk · Published May 23, 2026 · 3 min read
- RMD age is 73 for anyone born 1951 to 1959; 75 for anyone born 1960 or later
- Applies to Traditional IRA, 401(k), 403(b), SEP, SIMPLE. NOT Roth IRA (no RMD during owner's lifetime)
- Formula: prior year-end balance / IRS Uniform Lifetime Table divisor
- Penalty for missed RMD: 25% (reduced from 50% by SECURE 2.0), with 10% if corrected within 2 years
- Qualified Charitable Distribution (QCD) up to 105,000 USD per year satisfies RMD tax-free
If you turn 73 in 2026, the IRS expects you to start withdrawing money from your pre-tax retirement accounts whether you need it or not. Required Minimum Distributions (RMDs) exist because Traditional IRA and 401(k) balances were never taxed; the IRS uses RMDs to force the tax to eventually come due. Get the calculation right and you owe ordinary income tax on the withdrawal; miss it entirely and the penalty was historically 50% of the missed amount (reduced to 25% under SECURE 2.0, with further reduction to 10% if corrected promptly).
When RMDs start
| Birth year | RMD start age | First RMD year |
|---|---|---|
| 1950 or earlier | 72 (legacy rule) | Started by 2022 |
| 1951 | 73 | 2024 |
| 1952 | 73 | 2025 |
| 1953 | 73 | 2026 |
| 1954 | 73 | 2027 |
| 1955 to 1959 | 73 | 2028 to 2032 |
| 1960 or later | 75 | 2035 or later |
SECURE Act 2.0 (passed December 2022) raised the RMD age from 72 to 73 for most current pre-retirees and to 75 for younger retirees. The first RMD can be delayed until April 1 of the year AFTER you reach RMD age; subsequent years must be taken by December 31.
How to calculate your RMD
Three steps:
- 1. Find your account balance on December 31 of the prior year. For a 2026 RMD, use the December 31, 2025 balance.
- 2. Look up your divisor in the IRS Uniform Lifetime Table for your age in 2026.
- 3. Divide balance by divisor. That is your minimum withdrawal for the year.
Calculate separately for each Traditional IRA (you can withdraw the total from any one IRA). Calculate separately for each 401(k) AND withdraw from each plan separately (you cannot aggregate 401(k)s across employers).
IRS Uniform Lifetime Table (selected years)
| Age in year of RMD | Divisor | Implied withdrawal % |
|---|---|---|
| 73 | 26.5 | 3.77% |
| 75 | 24.6 | 4.07% |
| 80 | 20.2 | 4.95% |
| 85 | 16.0 | 6.25% |
| 90 | 12.2 | 8.20% |
| 95 | 8.9 | 11.24% |
RMD percentage RISES with age. At 73 you withdraw ~3.8% of the prior year-end balance; by 90 it is over 8%. The math reflects life expectancy; the IRS wants the account effectively drained over your expected remaining years.
Worked example
Profile: born March 1953, turns 73 in 2026, Traditional IRA balance was 600,000 USD on December 31, 2025.
| Step | Calculation | Amount |
|---|---|---|
| Prior year-end IRA balance | Dec 31 2025 snapshot | 600,000 USD |
| Uniform Lifetime Table divisor (age 73) | From IRS Pub 590-B Table III | 26.5 |
| 2026 RMD | 600,000 / 26.5 | 22,642 USD |
| Federal income tax (assume 22% bracket) | 22,642 × 0.22 | 4,981 USD |
| Net after federal tax | 17,660 USD |
Plus state tax depending on residence; many states do not tax retirement income (PA, IL, MS), some tax fully (CA, OR), some partially exclude (NY, GA).
Strategies to reduce RMD tax
- Qualified Charitable Distribution (QCD). Up to 105,000 USD in 2026 can be transferred directly from your IRA to a qualified charity. The transfer satisfies your RMD AND is tax-free. The single best move for charitably-inclined RMD-age retirees.
- Roth conversions BEFORE RMD age. Every dollar in Roth has no RMD. Converting Traditional balances to Roth in your 60s reduces future RMDs and the resulting tax bracket creep in your 70s and 80s.
- Withdraw extra in low-income years. If you have a year of low income (between retirement and Social Security claiming, or after a spouse's death), withdraw EXTRA Traditional dollars beyond the RMD. Stay in a lower bracket now to avoid a higher bracket later.
- Keep working past 73. If you are still employed at your CURRENT employer (not retired, not the employer who held a prior 401(k)), the 401(k) at your current job is exempt from RMDs. Roll old 401(k)s INTO your current plan to defer RMDs on those balances.
The penalty for missed RMDs
SECURE 2.0 reduced the missed-RMD penalty from 50% to 25% of the amount that should have been withdrawn. If you correct within 2 years (withdraw the missed amount and file Form 5329 + a corrected return), the penalty drops further to 10%.
If you missed an RMD by accident, the IRS often waives the penalty under 'reasonable cause' if you (1) take the missed RMD as soon as you realize, (2) file Form 5329 with a letter of explanation, and (3) have not missed RMDs in prior years. Waiver requests have a very high approval rate.
Frequently asked questions
At what age do RMDs start in 2026?
Age 73 if you were born between 1951 and 1959. Age 75 if you were born 1960 or later. Your first RMD can be delayed until April 1 of the year following the year you reach the start age, but subsequent RMDs must be taken by December 31.
Are Roth IRAs subject to RMDs?
No. Roth IRA owners are never required to take distributions during their lifetime. After death, beneficiaries face their own RMD rules (10-year payout under SECURE Act for most non-spouse beneficiaries). Roth 401(k)s WERE subject to RMDs but SECURE 2.0 removed that requirement starting 2024.
What is a QCD and how do I use it?
Qualified Charitable Distribution. You direct your IRA custodian to transfer money DIRECTLY to a 501(c)(3) charity (not through your hands). The transfer counts toward your RMD AND is excluded from your taxable income. 2026 limit: 105,000 USD per individual per year. Available starting at age 70 and a half (not the RMD start age).
What is the penalty for missing an RMD?
25% of the amount that should have been withdrawn (reduced from 50% by SECURE 2.0). If you correct within 2 years by withdrawing the missed amount and filing Form 5329 with an explanation, the penalty drops to 10%. The IRS often waives the penalty entirely for first-time honest mistakes.
Can I take more than the RMD?
Yes, you can withdraw any amount above the RMD; you only have to withdraw AT LEAST the RMD. Excess withdrawals are still taxed as ordinary income. There is no 'rollover' of unused RMD; if you take 30,000 in 2026 against a 22,000 RMD, your 2027 RMD is calculated on the 2026 ending balance independently.
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