Originally published June 2016. Last updated March 2026.
If you’ve been saving in a 401(k), traditional IRA, or other tax-deferred retirement account, there’s a date coming when the IRS says you have to start taking money out. That’s your required minimum distribution, or RMD.
The rules have changed multiple times in recent years. Here’s where things stand now.
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When Do RMDs Start?
It depends on when you were born:
- Born 1950 or earlier: RMDs already started at age 72
- Born 1951-1959: RMDs start at age 73
- Born 1960 or later: RMDs start at age 75
Your first RMD is due by April 1 of the year after you reach the applicable age. Every RMD after that is due by December 31. If you delay your first RMD to April 1, you’ll have to take two distributions that year (one for the previous year, one for the current year), which could push you into a higher tax bracket.
How Is Your RMD Calculated?
Take the total balance of your tax-deferred retirement accounts as of December 31 of the previous year. Divide that by the life expectancy factor from the IRS Uniform Lifetime Table (updated in 2022).
For example, if you’re 75 and your combined IRA balance was $500,000 on December 31, your life expectancy factor is 24.6. Your RMD would be $500,000 / 24.6 = $20,325.
The factor decreases each year as you age, meaning you withdraw a larger percentage over time.
8 Things You Should Know
1. RMDs are taxed as ordinary income
The full amount of your RMD is added to your taxable income for the year. That can affect your tax bracket, Medicare premiums (IRMAA), and how much of your Social Security is taxable.
2. The penalty for missing an RMD dropped
Under SECURE 2.0, the penalty for failing to take an RMD decreased from 50% to 25% of the shortfall. If you correct the mistake within two years, it drops further to 10%. Still not cheap, but less devastating than before.
3. You must take RMDs from each account type
If you have multiple traditional IRAs, you can take the total RMD from any one of them. But 401(k) RMDs must be taken from each 401(k) separately. You can’t take a 401(k) RMD from your IRA.
4. Roth IRAs don’t have RMDs during your lifetime
This is one of the biggest advantages of Roth accounts. No RMDs while you’re alive. Your money keeps growing tax-free. (Roth 401(k)s previously had RMDs, but SECURE 2.0 eliminated that starting in 2024.)
5. You can still work and delay employer plan RMDs
If you’re still working past the RMD start age and don’t own more than 5% of the company, you can delay RMDs from your current employer’s plan until the year you actually retire. This doesn’t apply to IRAs.
6. Qualified charitable distributions (QCDs) can satisfy your RMD
If you’re 70 and a half or older, you can donate up to $105,000 per year directly from your IRA to a qualified charity. It counts toward your RMD and isn’t included in your taxable income. If you’re already giving to charity, this is one of the best tax moves available.
7. You can’t contribute to a traditional IRA after RMDs begin — but that rule has nuance
The old rule that you couldn’t contribute to a traditional IRA after 70 and a half was eliminated by the SECURE Act. You can now contribute to a traditional IRA at any age as long as you have earned income. However, if you’re also taking RMDs, the contribution won’t offset the distribution for tax purposes.
8. Strategic Roth conversions before RMDs can save you a lot
The years between retirement and your RMD start age are often your lowest-income years. Converting traditional IRA funds to a Roth during this window means paying taxes at a lower rate and reducing your future RMD amounts. We see clients save $5,000-$30,000 per year in taxes through well-timed conversions.
FAQ
Can I reinvest my RMD?
Yes, but not back into a tax-deferred account. Once you take the distribution, you can invest it in a taxable brokerage account, a Roth IRA (if you have earned income and meet the requirements), or anywhere else.
What if I don’t need the money?
You still have to take it. Consider a QCD to charity, or reinvest in a taxable account. You could also gift the after-tax amount to family members using your annual gift exclusion ($18,000 per person in 2024).
Do RMDs apply to inherited IRAs?
For most non-spouse beneficiaries who inherited after 2019, the 10-year rule applies instead of traditional RMDs. See our guide to inherited IRAs for details.
RMDs don’t have to catch you off guard. With the right planning, you can minimize the tax impact and make your retirement savings last longer.
Schedule a free 20-minute consultation to review your distribution strategy.
R.L. Brown Wealth Management
106 W Vine St, Suite 300, Lexington, KY 40507
859.317.5889
