Required Minimum Distribution Planning
Required minimum distributions force money out of traditional IRAs and workplace plans each year starting at 73, or 75 if you were born in 1960 or later. Miss one and the penalty is 25% of the shortfall, reduced to 10% if you fix it in time. On a $900,000 IRA at age 75, the RMD is about $36,585, and a missed one could cost about $9,146.
Reviewed by Ebot Mbi, CPA, EA · Last reviewed October 9, 2026
Who it fits
- Anyone 70 or older with traditional IRA, 401(k), 403(b) or SEP balances
- People in their 60s with large pre-tax balances who want to manage future RMDs
- Charitably inclined retirees who can use qualified charitable distributions
- Business owners still working who need to know which plans can wait
Who it's not for
- Roth IRA owners for their own Roth accounts, which have no lifetime RMDs
- Roth 401(k) balances, which no longer require lifetime RMDs starting in 2024
- Beneficiaries of inherited accounts, who follow separate inherited-account rules
How it works
Your required beginning age is 73 if you were born from 1951 through 1959, and 75 if born in 1960 or later. The first RMD can wait until April 1 of the following year, but then two RMDs are taxed in that year. Most people take the first one in the year they reach the age.
The amount is your December 31 prior-year balance divided by a life-expectancy factor from the IRS Uniform Lifetime Table. If your spouse is your sole beneficiary and more than 10 years younger, a different table gives a smaller RMD.
IRA RMDs can be totaled and taken from any one or more of your IRAs. 403(b) RMDs can be combined among 403(b)s. Each 401(k) must pay its own. If you are still working and own 5% or less of the employer, that employer's plan can wait until you retire.
From age 70½, a qualified charitable distribution sent directly from your IRA to a charity counts toward your RMD and is excluded from income. The annual QCD limit is indexed for inflation each year.
RMDs cannot be rolled over or converted to a Roth. That is why Roth conversions in the low-income years before RMDs begin can reduce future RMDs and the tax on them.
Illustrative example
Illustrative: an IRA owner born in 1951 turns 75 in 2026. The IRA balance on December 31, 2025 was $900,000. The Uniform Lifetime Table factor at 75 is 24.6. The owner gives $10,000 to charity each year.
- 2026 RMD: $900,000 / 24.6 = $36,585
- Send $10,000 directly to charity as a QCD: counts toward the RMD
- Remaining taxable distribution: $36,585 - $10,000 = $26,585
- Penalty if the full RMD were missed: $36,585 x 25% = $9,146
- Penalty if corrected within the correction window: $36,585 x 10% = $3,659
Taking the RMD on time avoids a penalty of up to $9,146, and the QCD keeps $10,000 of it out of taxable income.
The rules
| Rule | Citation |
|---|---|
| Required minimum distributions begin at the applicable age: 73, or 75 for those born in 1960 or later. | IRC §401(a)(9)(C) |
| The RMD is the prior year-end balance divided by the applicable life-expectancy factor. | Treas. Reg. §1.401(a)(9)-9 |
| A missed RMD is subject to a 25% excise tax, reduced to 10% if corrected within the correction window. | IRC §4974(a), (e) |
| Qualified charitable distributions from an IRA at 70½ or older are excluded from income. | IRC §408(d)(8) |
Watch-outs
- Delaying the first RMD to April 1 stacks two RMDs into one tax year.
- The QCD must go directly from the IRA to the charity. A check made out to you is a taxable distribution.
- Larger RMDs can raise Medicare premiums two years later and reduce the senior deduction available for 2025-2028.
- Taking the RMD from the wrong account type, such as a 401(k) RMD from an IRA, does not satisfy it.
What we do
We calculate each year's RMD by account, set withholding so it doubles as your estimated tax, and coordinate QCDs and Roth conversions with your advisor. If an RMD was missed, we file Form 5329 and request penalty relief where the facts support it.
Questions
Can I take the RMD all at once in December?
Yes. Any time during the year works. Withholding on a December distribution is treated as paid evenly through the year, which can also cover estimated tax.
What if I already missed one?
Take the missed amount as soon as possible and file Form 5329. Correcting within the window reduces the penalty to 10%, and the IRS can waive it for reasonable cause.
Do I need an RMD from my Roth IRA?
No. Original owners of Roth IRAs have no lifetime RMDs.