What is a Required Minimum Distribution (RMD)?
A Required Minimum Distribution (RMD) is the minimum dollar amount the IRS forces you to withdraw each year from most tax-deferred US retirement accounts beginning at age 73. It equals the prior-year-end account balance divided by an IRS Uniform Lifetime Table factor (26.5 at age 73). Missing the December 31 deadline triggers a 25 percent excise tax under SECURE Act 2.0, reducible to 10 percent if corrected within 2 years.
Detailed definition
The Required Minimum Distribution exists because Congress lets retirement-account dollars compound tax-free or tax-deferred for decades, but only on the condition that the IRS eventually gets to tax them. Without an RMD rule, a high earner could leave a multi-million-dollar 401(k) untouched into their 90s, then pass it to grandchildren and dodge tax for generations. The RMD machinery, originally introduced in 1986, forces the account to drain on a defined schedule so that ordinary income tax gets collected over the owner's lifetime.
The start age has moved repeatedly. Until 2019 it was 70 1/2 (the IRS uses half-year ages for some retirement rules). SECURE Act 1.0 in 2019 raised it to 72 for anyone reaching 70 1/2 after 2019. SECURE Act 2.0 in 2022 raised it to 73 for anyone turning 73 between 2023 and 2032, and to 75 for anyone turning 74 in 2033 or later. The first-year deferral to April 1 of the following calendar year (the "Required Beginning Date") gives a one-time grace period, but doubling up two RMDs in one tax year usually costs more in tax than just taking the first RMD on time.
The current Uniform Lifetime Table was updated by IRS final regulations in November 2020 (effective 2022) to reflect longer life expectancy. The new table reduced RMDs by roughly 7 percent at every age compared to the old table. The Single Life Table for inherited IRAs and the Joint Life and Last Survivor Expectancy Table (used when a spouse is more than 10 years younger and the sole beneficiary) were updated in the same regulations.
Formula
RMD = (Prior-year-end balance) / (IRS Uniform Lifetime Table factor for your age) Selected 2026 Uniform Lifetime Table factors: Age 73 -> 26.5 (3.77% required withdrawal) Age 75 -> 24.6 (4.07%) Age 80 -> 20.2 (4.95%) Age 85 -> 16.0 (6.25%) Age 90 -> 12.2 (8.20%) Age 95 -> 8.9 (11.24%)
- Prior-year-end balance: the fair-market value of the account on December 31 of the year before the RMD year.
- Uniform Lifetime Table: IRS Publication 590-B, Appendix B, Table III. Used by every account owner whose spouse is not more than 10 years younger.
- Joint Life Table: used instead when your sole beneficiary is a spouse more than 10 years younger; produces a larger factor (smaller RMD).
- Aggregation rule: IRA RMDs can be aggregated across all your IRAs and taken from any one; 401(k) RMDs must be taken separately from each plan.
Worked example
Take a retiree who turns 73 on March 4, 2026, has a $500,000 Traditional IRA balance on December 31, 2025, and is unmarried (so the Uniform Lifetime Table applies).
- Prior-year-end balance: $500,000 on December 31, 2025.
- Age at year-end 2026: 73 (born March 1953).
- Uniform Lifetime Table factor: 26.5 at age 73.
- RMD amount: $500,000 / 26.5 = $18,868 (rounded to the dollar).
- Federal tax at 22 percent marginal bracket: $18,868 x 22 percent = $4,151.
Common pitfalls
- Forgetting the December 31 deadline. The RMD is due by year-end, not April 15. Only the very first RMD can be deferred to April 1 of the following year, and deferring stacks two RMDs into one tax year (often a bracket-pushing mistake).
- Aggregating 401(k) RMDs. IRAs can be aggregated but 401(k), 403(b), and 457(b) plans cannot. Each workplace plan must distribute its own RMD or it counts as a separate missed RMD with its own 25 percent excise.
- Ignoring inherited IRAs. Most non-spouse beneficiaries are subject to the 10-year rule (account fully drained within 10 years of the original owner's death), and the IRS clarified in 2024 that annual RMDs are also required during those 10 years if the original owner was already past RMD age.
- Missing the QCD optimization. If you give to charity, a Qualified Charitable Distribution up to $108,000 in 2026 (indexed) satisfies the RMD without raising AGI. That keeps Medicare IRMAA premiums lower and preserves the standard deduction.
- Selling at the wrong time. RMDs can be taken in-kind (transfer shares from IRA to a taxable brokerage at the current price) so you do not need to sell into a falling market. The IRS taxes the fair-market value on the date of distribution either way.
- Skipping Form 5329. If you miss an RMD, the penalty does not get automatically waived; you must file Form 5329 with the late distribution plus a reasonable-cause statement to qualify for the 10 percent corrected rate or a full waiver.
Related terms
Related calculators on 3Tej
Calculate your own RMD or model Roth conversions to shrink future RMDs:
Frequently asked questions
When do RMDs start under SECURE Act 2.0?
Required Minimum Distributions start at age 73 for anyone turning 73 between 2023 and 2032, and rise to age 75 for anyone turning 74 in 2033 or later. Before SECURE 1.0 in 2019 the start age was 70 1/2, then 72 from 2020 through 2022. Your very first RMD can be deferred to April 1 of the year after you reach the start age, but if you defer, you must take two RMDs that calendar year.
Which retirement accounts require RMDs?
Traditional IRAs, SEP-IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, 457(b)s, profit-sharing plans, and other tax-deferred employer plans all require RMDs. Roth IRAs have no RMDs during the original owner's lifetime. Roth 401(k) and Roth 403(b) accounts no longer require lifetime RMDs starting in tax year 2024, thanks to SECURE Act 2.0.
What is the penalty for missing an RMD?
The penalty is a 25 percent excise tax on the shortfall, reduced from 50 percent by SECURE Act 2.0. It drops further to 10 percent if you correct within 2 years by withdrawing the missed amount and filing IRS Form 5329 with a reasonable-cause explanation. The IRS routinely waives the penalty for honest mistakes that are promptly corrected, but you must request the waiver explicitly on Form 5329.
How do I calculate my RMD for 2026?
Take your account balance as of December 31, 2025 and divide by the IRS Uniform Lifetime Table factor for your age on December 31, 2026. The factors are 26.5 at 73, 25.5 at 74, 24.6 at 75, and decline gradually each year (down to 1.9 at age 120 plus). If your spouse is your sole beneficiary and more than 10 years younger, use the Joint Life and Last Survivor Expectancy Table instead, which produces a smaller RMD.
Can I avoid or reduce RMDs?
You cannot avoid the rule outright but you can shrink the dollar amount. Roth conversions before age 73 permanently remove dollars from the RMD base because Roth IRAs are exempt. Qualified Charitable Distributions (QCDs) of up to $108,000 in 2026 satisfy the RMD without showing as taxable income on your return. Still working past 73 may let you defer RMDs from your current employer's 401(k) (the still-working exception, not available for IRAs).
Can I reinvest my RMD into another retirement account?
No. An RMD cannot be rolled over into any other retirement account, including a Roth IRA. You can, however, take the RMD as cash and then make a separate Roth IRA contribution that year if you have earned income (up to the $7,000 / $8,000 IRA limit). The RMD itself can also be reinvested in a taxable brokerage account or used to pay current expenses.
Sources and further reading
- IRS (2025) Retirement Topics: Required Minimum Distributions (RMDs) - official rules, start age, exceptions.
- IRS Publication 590-B (2025) Appendix B - Uniform Lifetime Table, Single Life Table, and Joint Life and Last Survivor Expectancy Table.
- Treasury Decision 9930 (November 2020) - final regulations updating the life-expectancy tables effective 2022.
- Congress (2022) SECURE 2.0 Act of 2022, Sections 107 (age 73 / 75), 302 (penalty reduction), 325 (Roth 401(k) RMD removal).
- IRS Notice 2024-35 - guidance on inherited IRA 10-year-rule annual RMDs and 2024 penalty relief.