Required Minimum Distributions (RMDs): IRS Rules, SECURE 2.0 Changes, Calculation Formula & Tax-Smart Strategies for 2026

What Are Required Minimum Distributions and Why They Matter in 2026

A required minimum distribution (RMD) is the minimum amount the IRS compels you to withdraw each year from tax-deferred retirement accounts once you reach a certain age. The purpose is straightforward: Congress granted a tax break when you contributed to a Traditional IRA, 401(k), 403(b), SEP IRA, or SIMPLE IRA—deferring income tax on contributions and investment gains. RMDs ensure the government eventually collects that deferred tax. According to IRS retirement topics on RMDs, you generally must start taking distributions by April 1 of the year following the calendar year in which you reach age 73. Failing to withdraw the full RMD amount triggers one of the harshest penalties in the tax code—an excise tax on the shortfall. For the roughly 73 million baby boomers and the growing number of Gen X workers approaching retirement, understanding RMD mechanics is essential to preserving the wealth they have spent decades building.[2]

The landscape of RMD rules has shifted dramatically since 2019. The original SECURE Act of 2019 raised the RMD starting age from 70½ to 72. Then the SECURE 2.0 Act of 2022 pushed it further to 73 for those born between 1951 and 1959, and to 75 for those born in 1960 or later (effective in 2033). SECURE 2.0 also cut the penalty for missed RMDs from a punishing 50% to 25%, with a further reduction to just 10% if you correct the error within two years. Meanwhile, inherited IRAs now follow a strict 10-year depletion rule for most non-spouse beneficiaries, replacing the old "stretch IRA" strategy. These overlapping changes mean that the RMD planning you learned five years ago may no longer be accurate. This guide covers every rule currently in effect for 2026, based on 27 authoritative sources including the IRS, SEC, FINRA, CFP Board, and major brokerages.[14, 15]

SECURE Act & SECURE 2.0: How RMD Rules Changed

Before the SECURE Act of 2019, the RMD starting age was 70½—a threshold that had been in place since IRAs were created in 1974. The SECURE Act raised that age to 72, effective January 1, 2020, giving retirees an additional 18 months of tax-deferred growth. Then the SECURE 2.0 Act, enacted as Division T of the Consolidated Appropriations Act of 2023, pushed the age further in two steps: age 73 for individuals born between 1951 and 1959 (effective January 1, 2023), and age 75 for those born in 1960 or later (effective January 1, 2033). A drafting error in the original SECURE 2.0 text appeared to assign two starting ages to people born in 1959; the IRS resolved this ambiguity in its July 2024 proposed regulations, confirming that birth year 1959 uses age 73 and birth year 1960 uses age 75.[15]

SECURE 2.0 also delivered two other critical RMD changes. First, Section 302 reduced the excise tax on missed RMDs from 50% to 25%, effective for tax years beginning after December 29, 2022. If the account owner corrects the shortfall by the end of the correction window—the second tax year after the year the penalty is imposed—the rate drops further to just 10%. Second, Section 325 eliminated pre-death RMDs for designated Roth accounts in employer plans (Roth 401(k), Roth 403(b), and governmental Roth 457(b)), effective for taxable years beginning after December 31, 2023. Before this change, Roth 401(k) participants had to take RMDs or roll the balance to a Roth IRA to avoid them. Starting in 2024, Roth employer plan balances can grow tax-free indefinitely during the owner's lifetime—matching the treatment that Roth IRAs have always enjoyed. According to the Congressional Research Service overview of SECURE 2.0, these provisions collectively modernized RMD policy to reflect increased life expectancies and shifting retirement savings patterns.[24]

One additional note: the One Big Beautiful Bill Act (OBBBA), signed on July 4, 2025, made the seven individual income tax rates from the Tax Cuts and Jobs Act permanent—10%, 12%, 22%, 24%, 32%, 35%, and 37%. According to the IRS summary of OBBBA provisions, these rates are now locked in for the foreseeable future. The OBBBA did not change any RMD rules, but the permanent rate structure is important context for RMD tax planning: the bracket you occupy when distributions are forced can be predicted with greater confidence than before OBBBA, making strategies like pre-RMD Roth conversions and bracket-filling more plannable.[10]

How to Calculate Your RMD: Step-by-Step Formula

The RMD calculation is conceptually simple: divide your account balance as of December 31 of the prior year by the distribution period from the IRS Uniform Lifetime Table. For example, if your Traditional IRA held $500,000 on December 31, 2025, and you turn 73 in 2026, your distribution period is 26.5 (from IRS Publication 590-B, Table III). Your 2026 RMD would be $500,000 ÷ 26.5 = $18,868. The Uniform Lifetime Table was updated in 2022 to reflect longer life expectancies, which reduced RMDs compared to the old table. Key factors for common ages: 72 = 27.4, 73 = 26.5, 74 = 25.5, 75 = 24.6, 80 = 20.2, 85 = 16.0, 90 = 12.2. As you age, the distribution period shrinks and the required withdrawal percentage grows—from about 3.8% at age 73 to roughly 8.2% at age 90.[1, 3]

There is one important exception to the standard table. If your sole beneficiary is a spouse who is more than 10 years younger, you use the Joint Life and Last Survivor Expectancy Table (Table II in Publication 590-B) instead of the Uniform Lifetime Table. This produces a longer distribution period and a smaller RMD, because the IRS accounts for the younger spouse's life expectancy. For all other beneficiary situations—including no named beneficiary, a non-spouse beneficiary, or a spouse who is fewer than 10 years younger—you use the Uniform Lifetime Table. The IRS provides RMD worksheets to walk through both calculations. If you hold multiple IRAs, you must calculate the RMD for each account separately using its own December 31 balance, though you may aggregate and withdraw the total from one or more IRAs (discussed in Section 5).[4]

RMD Rules by Account Type: Which Accounts Require Distributions

RMDs apply to all tax-deferred retirement accounts: Traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k) plans, 403(b) plans, and governmental 457(b) plans. Each of these received a tax deduction or exclusion when money went in, and RMDs ensure the deferred tax is eventually paid. The critical exception is the Roth IRA: during the original owner's lifetime, Roth IRAs are not subject to RMDs. Because Roth IRA contributions were made with after-tax dollars, Congress does not require distributions to collect deferred revenue—there is none to collect. This makes Roth IRAs uniquely powerful as long-term wealth-building and estate-transfer vehicles, since assets can compound tax-free for the owner's entire lifetime. According to IRS guidance on Traditional and Roth IRAs, the Roth IRA's freedom from lifetime RMDs is one of its defining structural advantages.[12]

For Roth accounts in employer plans—Roth 401(k), Roth 403(b), and governmental Roth 457(b)—the rules changed significantly under SECURE 2.0. Prior to 2024, these accounts were subject to RMDs during the owner's lifetime despite being funded with after-tax dollars. Many participants worked around this by rolling their Roth 401(k) balance into a Roth IRA before their required beginning date. Starting with the 2024 tax year, SECURE 2.0 Section 325 eliminated this inconsistency: designated Roth accounts in employer plans are no longer subject to pre-death RMDs. This eliminates the need for the Roth IRA rollover workaround and allows Roth employer plan balances to compound tax-free indefinitely. However, note that after the owner's death, beneficiaries of Roth accounts—whether IRA or employer plan—are still subject to the inherited account distribution rules discussed in Section 9.[15]

RMD Aggregation: Can You Combine Distributions Across Accounts?

The IRS aggregation rules for RMDs are one of the most commonly misunderstood aspects of retirement distribution planning. For Traditional IRAs (including SEP IRAs and SIMPLE IRAs), you must calculate the RMD for each account separately based on its own December 31 prior-year balance, but you may then aggregate the total and withdraw it from any one or more of your IRAs. This gives you flexibility to choose which account to tap—for instance, you might withdraw entirely from the IRA with the poorest-performing investments or the one held at a brokerage with higher fees. According to IRS RMD FAQs, this aggregation rule applies only to IRAs; it does not extend to employer plans.[6]

For 401(k), 403(b), and 457(b) employer plans, the rules are stricter. You must calculate and withdraw the RMD from each employer plan individually. You cannot satisfy a 401(k) RMD by withdrawing extra from your IRA, and you cannot combine RMDs across two different 401(k) plans from different employers. There is one narrow exception: 403(b) plans may be aggregated with other 403(b) plans (but not with IRAs or 401(k)s). The practical implication is that if you have old 401(k) accounts scattered across former employers, each one generates its own separate RMD obligation. This is one reason financial advisors often recommend consolidating old 401(k)s into a single IRA or your current employer's plan before reaching RMD age—simplifying compliance and enabling the IRA aggregation flexibility.[6]

Penalties for Missing RMDs: The Excise Tax and How to Fix It

Missing an RMD triggers a 25% excise tax on the shortfall amount—the difference between what you were required to withdraw and what you actually took. Prior to SECURE 2.0, the penalty was a devastating 50%, making it one of the harshest penalties in the tax code. Section 302 of SECURE 2.0 cut it to 25% for tax years beginning after December 29, 2022, and introduced a further reduction: if you correct the error during the correction window (by the end of the second tax year following the year the excise tax is imposed), the rate drops to just 10%. To correct the shortfall, you simply withdraw the missed amount and file IRS Form 5329 with your tax return. If you believe the shortfall was due to reasonable cause rather than willful neglect, you may attach a letter of explanation to Form 5329 requesting a full waiver of the penalty—and historically, the IRS has been relatively lenient when the error was inadvertent and promptly corrected.[5, 15]

A common timing trap deserves emphasis: your first RMD must be taken by April 1 of the year following the year you reach age 73 (the "required beginning date"). All subsequent RMDs must be taken by December 31 of each year. If you delay your first RMD to the April 1 deadline, you will have two taxable RMDs in the same calendar year—the delayed first-year RMD plus the current-year RMD due by December 31. This double distribution can push you into a higher tax bracket, increase your Medicare Part B and D premiums through IRMAA surcharges, and potentially subject more of your Social Security benefits to taxation. For most retirees, taking the first RMD by December 31 of the year they turn 73—rather than waiting until April 1 of the following year—is the smarter move to avoid this bracket-stacking problem.[20]

The Still-Working Exception: Delay RMDs from Your Current Employer Plan

If you are still employed and participating in your employer's retirement plan past age 73, you may be able to delay RMDs from that specific plan until April 1 of the year after you retire. This is called the still-working exception (sometimes referred to as the "still working" or "age 72/73 exception" for employer plans). According to IRS RMD rules, the exception applies only if you do not own more than 5% of the business sponsoring the plan. Ownership is determined under IRC Section 318 attribution rules, meaning that ownership by your spouse, children, grandchildren, and parents counts toward your total—but not siblings. There is no minimum number of hours you must work; as long as you are considered "employed" by the plan sponsor, you qualify.[2]

Critically, this exception applies only to your current employer's plan. It does not apply to IRAs of any type (Traditional, SEP, SIMPLE), to plans at former employers, or to plans at companies where you own more than 5%. If you have a 401(k) from a previous job, that account is still subject to normal RMD rules regardless of your current employment status. A common planning strategy is to roll old employer plan balances into your current employer's 401(k) before reaching RMD age—if the plan accepts incoming rollovers—to consolidate all employer plan assets under the still-working exception umbrella. This rollover does not apply to IRAs: even if you are still working, your Traditional IRA RMD obligations remain on schedule. As FINRA's RMD guide emphasizes, the distinction between IRA and employer plan RMD rules is one of the most consequential details in retirement distribution planning.[18]

Qualified Charitable Distributions (QCDs): Reduce Taxes on Your RMD

A Qualified Charitable Distribution (QCD) is a direct transfer of funds from your IRA to a qualifying charity. QCDs are one of the most tax-efficient strategies available to retirees because the distribution counts toward satisfying your RMD but is excluded from your taxable income. For 2026, the annual QCD limit is $111,000 per individual ($222,000 for married couples filing jointly, if each spouse makes QCDs from their own IRA). The limit is indexed for inflation and has risen from $100,000 before SECURE 2.0 to $105,000 in 2024, $108,000 in 2025, and $111,000 in 2026. Importantly, the QCD eligibility age is 70½—not 73—so you can start making QCDs before RMDs even begin, proactively reducing your IRA balance and future RMD obligations. According to the Vanguard QCD guide, the distribution must go directly from your IRA custodian to the charity; if the funds touch your personal account first, the transfer does not qualify.[27]

SECURE 2.0 also introduced a new one-time QCD option: a $55,000 lifetime election (for 2026, indexed for inflation) to fund a split-interest entity—a charitable remainder unitrust (CRUT), charitable remainder annuity trust (CRAT), or charitable gift annuity (CGA). This one-time transfer counts against your annual QCD limit (leaving $56,000 for regular QCDs in 2026) and cannot be repeated in any future year at any amount. The split-interest QCD is particularly attractive for retirees who want to receive an income stream from the charity while also reducing their taxable IRA balance. All QCD-eligible distributions must come from an IRA; employer plan accounts (401(k), 403(b)) do not qualify for QCDs even after rolling into an IRA if the rollover and QCD occur in the same year. According to IRS charitable contribution guidance, QCDs also reduce the IRA balance used to calculate future RMDs, creating a compounding tax benefit over time.[11]

Inherited IRA RMD Rules: The 10-Year Rule Under SECURE Act

Before the SECURE Act of 2019, most non-spouse beneficiaries who inherited an IRA could "stretch" distributions over their own life expectancy—sometimes spanning 40 or 50 years. The SECURE Act replaced this with a 10-year depletion rule: most non-spouse designated beneficiaries must withdraw the entire inherited IRA balance by the end of the 10th year following the year of the account owner's death. This applies to deaths occurring after December 31, 2019. According to IRS beneficiary guidance, the 10-year rule applies to all designated beneficiaries who are not "eligible designated beneficiaries" (EDBs). The five categories of EDBs who still qualify for the stretch are: (1) surviving spouses, (2) minor children of the decedent (until they reach the age of majority, then the 10-year clock starts), (3) disabled individuals, (4) chronically ill individuals, and (5) beneficiaries not more than 10 years younger than the decedent.[7]

The IRS caused considerable confusion between 2020 and 2024 over whether annual distributions were required within the 10-year window, or whether beneficiaries could wait until year 10 to take the entire balance. In July 2024, the IRS published final regulations (260 pages in the Federal Register) that resolved the issue with a two-branch rule, effective January 1, 2025. Branch 1: If the original owner died before their required beginning date (i.e., before they were required to start taking RMDs), the beneficiary is not required to take annual distributions during years 1 through 9—they simply must empty the account by the end of year 10. Branch 2: If the original owner died on or after their required beginning date, the beneficiary must take annual RMDs during years 1 through 9 (using the single life expectancy table) and fully deplete the account by the end of year 10. The IRS waived penalties for missed annual distributions during 2021–2024 while the regulations were being finalized, but compliance is mandatory starting 2025. As Fidelity's inherited IRA guide notes, this two-branch distinction is now the single most important factor in inherited IRA planning.[16, 26]

Strategies to Minimize RMD Tax Impact

The most powerful long-term strategy is Roth conversions before RMD age. By converting portions of your Traditional IRA to a Roth IRA during lower-income years—such as early retirement before Social Security and RMDs kick in—you pay tax at today's known rates and permanently remove those assets from future RMD calculations. Under the permanent 2026 tax brackets, a married couple filing jointly can fill the 12% bracket up to $100,800 and the 22% bracket up to $211,400. Bracket-filling conversions—converting just enough each year to "fill" a desired bracket without spilling into the next—can systematically drain a Traditional IRA over 5 to 10 years, dramatically reducing or even eliminating future RMDs. According to Morningstar's RMD reduction strategies, pre-RMD Roth conversions can save retirees tens of thousands of dollars in lifetime taxes.[23, 25]

Beyond Roth conversions, several other strategies can reduce the tax bite of RMDs. Qualified Charitable Distributions (detailed in Section 8) exclude up to $111,000 per year from taxable income while satisfying your RMD. Tax-bracket timing involves bunching deductions in alternating years or timing Roth conversions alongside capital loss harvesting to offset the income. Charitable bunching with a donor-advised fund (DAF) lets you front-load several years of charitable giving into one year to exceed the standard deduction, then use QCDs in off years. If you hold appreciated securities in a taxable account, donating them directly to charity avoids capital gains tax and frees up cash to cover living expenses that would otherwise come from taxable RMDs. According to Vanguard's RMD planning resource, the most effective RMD tax strategies combine multiple approaches across accounts—Roth conversions, QCDs, asset location, and bracket management—rather than relying on any single tactic. Consulting a CFP Board-certified financial planner who adheres to fiduciary standards is strongly recommended for optimizing these overlapping strategies.[21, 19]

Frequently Asked Questions About Required Minimum Distributions

The following answers are based on IRS guidance, FINRA investor education materials, and SEC resources current as of March 2026.[6, 18, 17]

Key Takeaways

1. Know your RMD starting age. Under SECURE 2.0, RMDs begin at age 73 for those born 1951–1959 and age 75 for those born 1960 or later. Your first RMD is due by April 1 of the following year; all subsequent RMDs are due by December 31. 2. Calculate accurately. Your RMD equals your prior-year December 31 account balance divided by the IRS Uniform Lifetime Table factor for your age. Use the Joint Life Table only if your sole beneficiary is a spouse 10+ years younger. 3. Understand account-type differences. Traditional IRAs, 401(k)s, 403(b)s, SEP IRAs, and SIMPLE IRAs all require RMDs. Roth IRAs and (as of 2024) Roth employer plan accounts do not. IRA RMDs can be aggregated; 401(k) RMDs cannot.[2, 1]

4. Act fast on missed RMDs. The penalty is 25% of the shortfall, reducible to 10% if corrected within two years. File Form 5329 and request a waiver if the error was inadvertent. 5. Use QCDs to reduce taxes. Qualified Charitable Distributions of up to $111,000 per year (2026) satisfy your RMD while excluding the amount from taxable income—available starting at age 70½. 6. Plan Roth conversions before RMD age. Converting Traditional IRA assets to Roth during lower-income years is the single most effective way to permanently reduce future RMDs and their tax impact. 7. Consult a fiduciary advisor. RMD planning intersects with tax brackets, Medicare IRMAA, Social Security taxation, estate planning, and charitable giving. A CFP professional can coordinate these moving parts into a cohesive strategy tailored to your specific situation.[22, 19]