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Quick Answer
Required minimum distribution rules require most retirement account holders to begin withdrawals by age 73, as established by the SECURE 2.0 Act. The IRS calculates your annual RMD by dividing your prior year-end account balance by a life expectancy factor. Missing a deadline triggers a penalty of up to 25% of the amount not withdrawn. As of July 2025, these rules apply to traditional IRAs, 401(k)s, and most inherited accounts.
Required minimum distribution rules are federal mandates that force tax-deferred retirement savings back into taxable income once you reach a set age. Under the SECURE 2.0 Act, signed into law in December 2022, the starting age for RMDs was raised from 72 to 73, according to IRS guidance on required minimum distributions. That change gives retirees one additional year of tax-deferred compounding before mandatory withdrawals begin.
Congress continues to revise retirement legislation, and the penalty for non-compliance remains severe enough to erase years of careful saving. The rules also interact with Medicare premiums, estate planning, and charitable giving in ways that catch many retirees off guard.
Key Takeaways
- The RMD starting age is 73 for anyone born between 1951 and 1959, rising to 75 for those born in 1960 or later, per the SECURE 2.0 Act of 2022.
- Your annual RMD equals your prior December 31 account balance divided by an IRS life expectancy factor, 26.5 at age 73, from the Uniform Lifetime Table in IRS Publication 590-B.
- Missing the December 31 deadline triggers an excise tax of 25% on the shortfall, reduced to 10% if corrected within two years, per IRS Form 5329 guidelines.
- A Qualified Charitable Distribution of up to $105,000 per year satisfies your RMD while excluding that amount from taxable income, per IRS QCD rules.
- Non-spouse beneficiaries who inherit a retirement account after January 1, 2020, must deplete it within 10 years under the SECURE Act inherited account rules.
- Roth IRAs are exempt from RMDs during the owner’s lifetime, and Roth 401(k)s joined that exemption starting in 2024, per the SECURE 2.0 Act.
Who Must Take RMDs and From Which Accounts?
Nearly every owner of a tax-deferred retirement account must follow required minimum distribution rules once they reach age 73. Covered accounts include traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k) plans, 403(b) plans, and 457(b) plans sponsored by employers.
Roth IRAs are the notable exception. Because contributions to a Roth IRA versus a traditional IRA are made with after-tax dollars, the IRS does not require Roth IRA owners to take RMDs during their lifetime. Roth 401(k) accounts were previously subject to RMDs, but SECURE 2.0 eliminated that requirement starting in 2024.
Inherited Accounts and the 10-Year Rule
Non-spouse beneficiaries who inherit a retirement account after January 1, 2020, generally must deplete the entire account within 10 years under rules established by the original SECURE Act. The IRS clarified in 2024 that certain beneficiaries, those who inherited from an owner already taking RMDs, must also take annual distributions within that 10-year window, according to IRS SECURE Act guidance.
Spouses who inherit a retirement account have more flexibility. They can roll the inherited account into their own IRA, effectively restarting the RMD clock based on their own age. That option is not available to non-spouse beneficiaries, which makes the 10-year rule a significant planning constraint for adult children or other heirs.
Key Takeaway: Required minimum distribution rules apply to all tax-deferred accounts, traditional IRAs, 401(k)s, and employer plans, starting at age 73. Roth IRAs are exempt during the owner’s lifetime, but inherited accounts face a mandatory 10-year depletion rule under the SECURE Act.
How Is Your RMD Amount Calculated?
Your annual RMD is calculated by dividing your account’s prior December 31 balance by an IRS life expectancy factor from the Uniform Lifetime Table (Table III), which was updated in 2022 to reflect longer life expectancies. For a 73-year-old, that factor is 26.5, meaning a $500,000 balance produces an RMD of approximately $18,868.
If your sole beneficiary is a spouse more than 10 years younger, you use the Joint and Last Survivor Table instead, which produces a lower divisor and a smaller required withdrawal. The IRS publishes all applicable tables in IRS Publication 590-B, the authoritative reference for IRA distributions.
The life expectancy factor decreases each year as you age, so the percentage of your account you must withdraw rises over time. At age 80, the Uniform Lifetime Table factor is 20.2, pushing the required withdrawal from a $500,000 balance to roughly $24,752. At age 85, the factor drops to 16.0. The math compounds quickly for retirees with large balances who have delayed Roth conversions.
Aggregating Multiple Accounts
When you hold multiple traditional IRAs, you may calculate the total RMD across all accounts and withdraw the full amount from any one or any combination of those IRAs. This gives you flexibility to draw from whichever account has the most favorable investment position at year-end.
401(k) RMDs must be calculated and withdrawn separately for each plan. Aggregation is not permitted across plan types, so a retiree with two former employer 401(k)s must satisfy each plan’s RMD independently. This is a common source of errors, particularly for people who have changed jobs several times and never consolidated old accounts.
| Account Type | RMD Required? | 2025 Starting Age | Aggregation Allowed? |
|---|---|---|---|
| Traditional IRA | Yes | 73 | Yes (across IRAs) |
| Roth IRA | No (owner’s lifetime) | N/A | N/A |
| 401(k) / 403(b) | Yes | 73 | No (per-plan) |
| Roth 401(k) | No (2024 forward) | N/A | N/A |
| Inherited IRA (non-spouse) | Yes | Immediately (10-year rule) | Yes (across inherited IRAs) |
| SEP IRA | Yes | 73 | Yes (across IRAs) |
Key Takeaway: Divide your prior year-end account balance by the IRS Uniform Lifetime Table factor, 26.5 at age 73, to find your RMD. See the full calculation method in IRS Publication 590-B. 401(k) plans cannot be aggregated with IRAs.
What Are the RMD Deadlines and Penalties for Missing Them?
The standard deadline for taking your annual RMD is December 31 of the distribution year. There is one exception: your very first RMD may be delayed until April 1 of the year following the year you turn 73. Taking this delay means you will owe two RMDs in that second year, the delayed first and the current-year second, potentially pushing you into a higher tax bracket.
For most retirees, delaying the first RMD is not worth the trade-off. Doubling up distributions in one calendar year raises ordinary income, which can phase out deductions, increase Medicare premiums through IRMAA adjustments, and subject more Social Security benefits to taxation. Taking the first RMD in the year you actually turn 73 avoids all of that.
Failing to withdraw the full required amount triggers an excise tax. The SECURE 2.0 Act reduced this penalty from 50% to 25% of the shortfall, and further to 10% if you correct the missed RMD within two years. While the reduction was a meaningful improvement over prior law, 25% on a missed distribution is still a steep price.
The IRS may waive the excise tax if the shortfall resulted from reasonable error and steps were taken to remedy it. Form 5329 is used to report the missed distribution and request a penalty waiver, per IRS Form 5329 instructions. In practice, the IRS has historically been willing to grant relief for first-time errors with a clear paper trail, but that relief is not guaranteed and should not be relied on as a strategy.
Key Takeaway: The standard RMD deadline is December 31 each year. Missing it triggers an excise tax of up to 25% of the shortfall, reduced to 10% if corrected within two years per IRS Form 5329 guidelines.
How Do RMDs Affect Your Tax Bill and Medicare Premiums?
RMDs are taxed as ordinary income in the year received. They do not qualify for preferential long-term capital gains rates, regardless of how the underlying investments performed. For retirees with substantial account balances, this can be a jarring shift from the tax treatment they experienced during their accumulation years.
The tax impact compounds in several directions at once. A large RMD can push adjusted gross income above the thresholds that trigger Income-Related Monthly Adjustment Amounts (IRMAA), which are Medicare Part B and Part D surcharges based on income from two years prior. A single large distribution year can raise Medicare costs for two subsequent years.
RMDs also increase the income figure used to determine how much of your Social Security benefits are taxable. Up to 85% of Social Security benefits become subject to federal income tax once combined income exceeds $34,000 for individuals or $44,000 for married couples filing jointly. For retirees who assumed Social Security would be lightly taxed, RMDs are often the variable that changes that calculation.
State Tax Considerations
Federal rules set the floor, but state tax treatment of RMDs varies considerably. Some states exempt retirement income entirely. Others tax it at the same rate as ordinary income, and a handful tax only the portion above a certain threshold. Retirees relocating to lower-cost states in their early 70s sometimes discover the state income tax picture is meaningfully different from what they expected, so confirming the rules for your specific state before finalizing a move is worth the effort.
Key Takeaway: RMDs are taxed as ordinary income and can raise Medicare Part B and Part D premiums through IRMAA surcharges in subsequent years. Up to 85% of Social Security benefits may become taxable once RMDs push combined income above IRS thresholds, per IRS RMD guidance.
What Strategies Reduce the Tax Impact of Required Minimum Distributions?
Required minimum distribution rules force taxable income whether you need the cash or not, but several legal strategies can reduce the bite. The most widely used is the Qualified Charitable Distribution (QCD), which allows IRA owners age 70½ or older to donate up to $105,000 per year directly to a qualified charity, satisfying the RMD without the distribution counting as taxable income in 2025, per IRS QCD rules.
The QCD must be sent directly from the IRA custodian to the qualifying charity. If you receive the distribution first and then write a personal check to the charity, it does not qualify. That procedural detail matters, and it catches people off guard each year.
A second approach is Roth conversion. Converting traditional IRA funds to a Roth IRA before age 73 reduces the balance subject to future RMDs. If you are in a lower tax bracket now than you expect to be later, a partial conversion each year can be highly efficient. For a deeper look at how Roth and traditional accounts compare strategically, see our guide on Roth IRA versus traditional IRA planning and our updated analysis of IRA contribution limits for 2026.
Still Working After 73?
If you are still employed at age 73 and do not own more than 5% of the company sponsoring your 401(k), you may be able to defer RMDs from that specific plan until you retire. This exception applies only to the current employer’s plan. IRAs and old 401(k)s from former employers still require distributions on schedule.
Retirees evaluating their full income picture should also review their 401(k) contribution strategy for 2026 in the years leading up to age 73.
Timing Distributions Within the Year
You are not required to take your RMD in a single lump sum. Taking monthly or quarterly distributions smooths taxable income across the calendar year and can prevent large one-time spikes that push income over bracket thresholds or IRMAA levels. This is particularly relevant for retirees whose other income sources, Social Security, pensions, rental income, are relatively predictable, making the RMD the primary variable to manage.
Key Takeaway: A Qualified Charitable Distribution of up to $105,000 in 2025 satisfies your RMD tax-free when sent directly to charity. Roth conversions before age 73 permanently shrink the balance subject to future required minimum distribution rules per IRS QCD guidance.
How Did SECURE 2.0 Change Required Minimum Distribution Rules?
The SECURE 2.0 Act of 2022 was the most sweeping revision to required minimum distribution rules in decades. Its headline change raised the RMD starting age from 72 to 73, with a further increase to age 75 scheduled for individuals who turn 74 after December 31, 2032. This phased approach means the exact age that applies to you depends on your birth year.
SECURE 2.0 also eliminated RMDs for Roth 401(k) accounts effective 2024, aligning them with Roth IRA treatment. The penalty for missed RMDs was cut from 50% to 25%, with a further reduction to 10% for timely self-correction. According to the full text of SECURE 2.0 as passed by Congress, these changes were designed to encourage longer-term saving and simplify inherited account rules over time.
For retirees who rely heavily on fixed-income vehicles while managing distributions, understanding how rate environments affect reinvestment options matters. Our analysis of CD rate forecasts for 2026 can help you plan where RMD proceeds land after withdrawal.
Key Takeaway: SECURE 2.0 raised the RMD start age to 73 now and 75 by 2033, eliminated Roth 401(k) RMDs in 2024, and cut the missed-RMD penalty to 25%. Full details are in the SECURE 2.0 Act legislative text.
Which RMD Starting Age Applies to You, by Birth Year?
Your birth year determines which version of the RMD rules you fall under, and the difference is as large as two full years of additional tax-deferred growth.
Those born between 1951 and 1959 have age 73 as their required beginning date. Those born in 1960 or later will start at age 75 once that provision takes effect after December 31, 2032. Anyone born before 1951 was already subject to the prior age-72 rule and should have been taking distributions for some time.
The practical consequence is that a 63-year-old today has a full 12 years before RMDs begin, while a 70-year-old has only three. That gap changes how aggressively Roth conversions make sense in the years before the required beginning date. The earlier your window, the more time there is to methodically shift assets at controlled tax rates rather than being forced into distributions on the IRS’s schedule.
Coordinating RMDs With Social Security Claiming
For many retirees, the years between retirement and age 73 represent a low-income window. Social Security benefits may not yet be claimed, earned income has stopped, and required distributions have not started. That window is often the most tax-efficient time for Roth conversions, because income is temporarily low.
Delaying Social Security until age 70 to maximize benefits can be a strong strategy, but it should be evaluated alongside the cost of drawing down pre-tax IRA assets in the meantime. Withdrawing enough to cover living expenses while doing partial Roth conversions in those same years can produce a significantly better long-term tax outcome than letting a large pre-tax balance compound unchecked until forced distributions begin.
Key Takeaway: Those born 1951 to 1959 must start RMDs at 73; those born in 1960 or later start at 75. The gap between retirement and the required beginning date is often the best window for Roth conversions, per the SECURE 2.0 Act phase-in schedule.
What Should You Do With the Money After Taking Your RMD?
Once you satisfy the distribution requirement and pay any taxes owed, the remaining proceeds are yours to deploy however you choose. Many retirees assume the money must be spent, but that is not the case.
Common reinvestment options include taxable brokerage accounts, high-yield savings accounts, and Treasury securities. Some retirees place RMD funds into a CD ladder strategy to preserve principal while generating predictable income. Assets held in a taxable account will be subject to capital gains tax on growth, but at the preferential long-term rate rather than as ordinary income, often a better tax outcome than leaving the money in a traditional IRA.
One thing you cannot do is roll an RMD back into an IRA or qualified plan. IRS rules explicitly prohibit this. RMD dollars are permanently removed from tax-deferred status once distributed, so they need to be directed somewhere that fits your broader financial picture from the moment of withdrawal.
Charitable giving is worth flagging again here. If philanthropy is already part of your financial plan, routing the RMD directly to charity via a QCD before the money ever reaches your bank account is almost always more tax-efficient than taking the distribution, paying income tax, and then donating the after-tax proceeds.
Key Takeaway: RMD proceeds can be reinvested in taxable accounts, used for charitable giving via a QCD, or placed into fixed-income vehicles. They cannot be rolled back into an IRA. Per IRS RMD rules, once distributed, the funds lose their tax-deferred status permanently.
Frequently Asked Questions
What is the required minimum distribution age in 2025?
In 2025, the required minimum distribution starting age is 73 under the SECURE 2.0 Act. If you were born between 1951 and 1959, you must begin RMDs at 73. Those born in 1960 or later will not be required to start until age 75, once that provision takes effect after 2032.
Do I have to take an RMD from my Roth IRA?
No. Roth IRA owners are not subject to required minimum distribution rules during their lifetime. However, non-spouse beneficiaries who inherit a Roth IRA must still deplete the account within 10 years under the SECURE Act’s inherited account rules.
What happens if I miss my RMD deadline?
Missing your RMD triggers an IRS excise tax of 25% on the amount you failed to withdraw. That rate drops to 10% if you take the missed distribution and file a corrected return within two years. You report and request a waiver using IRS Form 5329.
Can I take more than my required minimum distribution?
Yes. You may always withdraw more than the RMD amount, there is no maximum withdrawal limit. However, excess withdrawals do not reduce future RMD amounts, and additional withdrawals are still taxed as ordinary income in the year received.
How are RMDs taxed?
RMDs from traditional IRAs, 401(k)s, and similar tax-deferred accounts are taxed as ordinary income at your marginal federal rate. They do not qualify for the lower long-term capital gains rates. Large RMDs can also trigger higher Medicare premiums through Income-Related Monthly Adjustment Amounts (IRMAA).
Can I reinvest my RMD after I take it?
Yes. After paying any taxes owed, you may reinvest RMD proceeds in a taxable brokerage account, a high-yield savings account, or other vehicles. Some retirees place RMD funds into a CD ladder strategy to preserve principal while generating predictable income. You cannot, however, roll an RMD back into an IRA or qualified plan.
Does my spouse’s age affect my RMD calculation?
Yes, if your sole beneficiary is a spouse more than 10 years younger than you. In that case, you use the Joint and Last Survivor Table rather than the Uniform Lifetime Table, which produces a lower life expectancy factor and a smaller required withdrawal each year. All applicable tables are published in IRS Publication 590-B.
