Once you hit a certain age, the IRS expects you to start pulling money out of most retirement accounts. These withdrawals are called Required Minimum Distributions, or RMDs. At age 73, you have to begin taking required minimum distributions from your IRA, 401(k), and most other tax-deferred retirement accounts every year.

The rules can feel a bit overwhelming at first. You’ll need to figure out which accounts actually require withdrawals, which ones don’t, and exactly when you’re supposed to start. There’s also the math—calculating the correct amount isn’t always as simple as it sounds.

Missing an RMD or not taking enough can lead to some pretty harsh penalties. But if you get a handle on when RMDs kick in, how to figure them out, and what changes if you inherit a retirement account, you can sidestep those costly mistakes. There are also ways to manage your withdrawals so they fit into your bigger retirement plan.

If you’re feeling unsure about how RMD rules apply to your specific situation, My Personal Tax CPA in Arlington, VA can help you make sense of it all. Our team works closely with retirees and pre-retirees to calculate accurate RMDs, coordinate withdrawals across multiple accounts, and integrate distributions into a broader tax-efficient retirement strategy. With personalized guidance and proactive planning, we help you stay compliant with IRS rules while minimizing taxes and avoiding unnecessary penalties.

What Are Required Minimum Distributions?

Required minimum distributions are just mandatory annual withdrawals from certain retirement accounts once you turn 73. The IRS set up these rules so people can’t keep money in tax-deferred accounts forever.

Definition and Purpose

A required minimum distribution is the minimum amount you must withdraw from your tax-deferred retirement accounts each year after age 73. You can always take out more if you want or need to, but you can’t go under that minimum.

The government wants its tax revenue on money that’s been growing tax-deferred for years. When you put money into traditional IRAs or 401(k)s, you got tax breaks up front. Now, the IRS says it’s time to start taking some out and paying taxes on it.

If you skip your RMD, the penalty is steep. The IRS can slap you with a 25% excise tax on whatever amount you didn’t withdraw. If you fix the mistake within two years, that penalty drops to 10%—still not fun, but better than the alternative.

How RMDs Affect Retirement Accounts

RMDs hit most tax-deferred retirement accounts: traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, and the like. Each account has its own RMD calculation based on the prior year-end balance.

Roth IRAs are a different story. You’re not required to take withdrawals from Roth IRAs while you’re alive. If you leave a Roth IRA to someone else, though, they’ll have to follow RMD rules.

Usually, these withdrawals count as taxable income unless you already paid taxes on the money or you’re taking a qualified Roth distribution. This extra income could nudge you into a higher tax bracket or mess with other parts of your finances.

Key Terms: RMD, Distribution Period, Required Beginning Date

The distribution period is a number you pull from IRS tables to figure out your RMD. You divide your account balance by this number to get your required withdrawal. Most folks use the Uniform Lifetime Table, but there are other tables if your spouse is a lot younger.

Your required beginning date is when you have to start taking money out. For IRAs, that’s April 1 of the year after you turn 73. With 401(k)s, some employers let you wait until April 1 after you retire—if you’re still working, that is.

After your first RMD, you’ll need to take distributions by December 31 every year moving forward.

Accounts Subject to RMD Rules

Required minimum distribution rules kick in for most tax-deferred retirement accounts at age 73. That includes traditional IRAs, 401(k)s, 403(b)s, and 457(b)s. Roth IRAs in your own name? Those are off the hook while you’re alive.

Traditional IRAs and RMDs

Your traditional IRA demands withdrawals starting at age 73, no matter if you’re working or retired.

The required minimum distribution rules here are pretty clear: start withdrawals by April 1 of the year after you hit 73.

If you have more than one traditional IRA, you need to calculate the RMD for each one. But you can take the total amount from any combination of your IRAs.

Employment status doesn’t matter for IRAs. Unlike some workplace plans, you can’t delay traditional IRA withdrawals just because you’re still clocking in somewhere.

401(k), 403(b), and 457(b) Plans

Your employer-sponsored retirement plans—401(k), 403(b), 457(b)—generally stick to the same age 73 rule.

There is one notable exception: if you’re still working for the company that sponsors your plan, you might be able to delay RMDs until after you retire. This only works if your plan allows it and you don’t own 5% or more of the company.

Each plan account needs its own RMD calculation. Unlike IRAs, you can’t combine RMDs across different employer plans. You have to withdraw the required amount from each specific plan.

Roth IRAs and Roth Accounts

You don’t need to take RMDs from Roth IRAs while you’re alive. That’s a big plus for Roth IRAs compared to traditional ones.

Roth 401(k)s and Roth 403(b)s used to require RMDs, but recent changes scrapped that rule. If you inherit a Roth IRA or Roth account, though, you’ll have to follow the RMD rules as a beneficiary.

SEP and SIMPLE IRAs

Your SEP IRA and SIMPLE IRA both make you start withdrawals at age 73, just like traditional IRAs.

These accounts are treated the same as traditional IRAs for RMDs. First withdrawal? April 1 of the year after you turn 73.

If you’ve got a mix of SEP, SIMPLE, and traditional IRAs, you can add up the RMDs and take the total from any combination of them. You’ll still need to calculate each RMD separately, though.

When Do You Need to Take RMDs?

The IRS sets pretty specific age requirements and deadlines for when you have to start taking RMDs. The first one has a unique deadline, and after that, it’s the same time every year.

Age Requirements and Key Dates

You need to start taking RMDs at age 73 from your traditional IRA, SEP IRA, SIMPLE IRA, and most workplace retirement plans if you were born in 1951 or later.

Your first RMD is due by April 1 of the year after you turn 73. So if you turn 73 in 2025, you have until April 1, 2026, for that first withdrawal.

But here’s the catch: if you wait until April 1 for your first RMD, you’ll have to take another one by December 31 that same year. After that, it’s always December 31.

Required Beginning Date Rules

The required beginning date is when you have to take your first RMD from your retirement accounts. For IRAs, it’s always April 1 after the year you turn 73, whether you’re retired or not.

You can’t put off IRA withdrawals just because you’re still working. This rule covers traditional IRAs, SEP IRAs, and SIMPLE IRAs.

Roth IRAs work differently. No RMDs from a Roth IRA during your lifetime. The RMD rules don’t apply to Roth IRAs while you’re alive, but if someone inherits your Roth, they’ll have to follow RMD rules.

Special Rules for Still-Working Employees

If you’re still working at age 73, you might be able to put off RMDs from your current employer’s retirement plan. This exception is only for workplace plans like 401(k)s and 403(b)s.

You can wait until April 1 after you actually retire, but only if you don’t own 5% or more of the company.

This still-working exception doesn’t apply to IRAs or old workplace plans. You need to take RMDs from those by the usual deadline, even if you’re working somewhere else. Each old plan needs its own RMD, and you can’t delay them.

How to Calculate Your RMD

The formula’s pretty simple: take your account balance from December 31 of the previous year and divide it by a life expectancy factor from the IRS tables. Most people use the Uniform Lifetime Table, but if you’re married and your spouse is much younger, you might get to use a different one for a lower RMD.

Using Account Balance and Life Expectancy Factor

To figure out your required minimum distribution, you’ll need your retirement account balance and your life expectancy factor. The balance is whatever your IRA or 401(k) was worth at the end of December last year. That includes all contributions, growth, and earnings up to that point.

Then you divide that number by your life expectancy factor. Your IRA provider usually lists your year-end balance on your statement. For the life expectancy factor, check the IRS Publication 590-B tables.

The math is: Account Balance ÷ Life Expectancy Factor = RMD Amount

Let’s say your account balance is $500,000 and your life expectancy factor is 25.5. Your RMD would be $19,608 for that year.

Uniform Lifetime Table and Alternatives

The Uniform Lifetime Table from the IRS is the go-to for most folks. It gives you a factor based on your age, and the number gets smaller as you get older. At 73, the factor is 26.5; by 80, it’s down to 20.2.

If your spouse is your only beneficiary and more than 10 years younger, you can use the Joint and Last Survivor Table, which gives you a bigger factor (so, a smaller RMD each year).

Quick rundown on which table to use:

• Uniform Lifetime Table: Most people use this
• Joint and Last Survivor Table: Only if your spouse is your sole beneficiary and 10+ years younger
• Single Life Expectancy Table: For inherited IRAs

Calculating RMDs for Multiple IRAs or Plans

If you own several traditional IRAs, you’ll need to figure out the RMD for each account separately. But here’s the good part: you can take the total withdrawal from just one IRA or split it up however you like. Just add up the individual RMDs, then withdraw that combined amount from whichever account—or accounts—work best for you.

401(k) and 403(b) plans are another story. With those, you’re stuck taking the RMD from each plan individually. No mixing and matching like with IRAs.

Plenty of RMD calculators can help sort out the numbers if you juggle more than one account. Miss an RMD or come up short? You could face a penalty tax and need to file Form 5329.

Tax Implications of Required Minimum Distributions (RMDs)

RMDs get counted as taxable income, taxed at your regular rate. That might nudge you into a higher bracket, so it’s worth thinking through how these withdrawals fit into your bigger tax picture. A little planning can sometimes keep your tax bill from ballooning.

Taxable Income and Ordinary Income

RMDs are taxed as ordinary income when they come from tax-deferred accounts—Traditional IRAs, 401(k)s, 403(b)s, SEP IRAs, you name it. The IRS treats these withdrawals just like salary or wages for tax purposes.

You’ll need to report the full Required Minimum Distributions amount on your federal return for the year you get it. It’s lumped in with all your other income: Social Security, investments, maybe even wages if you’re still working.

Your retirement account custodian will send you a Form 1099-R showing what you took out. The IRS gets a copy too, so they’ll know if your numbers don’t match. Missing a required distribution triggers an IRS penalty—25% of what you should have withdrawn.

Impact on Tax Brackets

Large RMDs can tip you into a higher tax bracket, raising your overall tax rate. If your other income is already close to the top of your current bracket, an RMD might be just enough to push you up a notch.

This doesn’t just affect federal taxes. Higher income from RMDs could mean steeper Medicare Part B and Part D premiums thanks to Income-Related Monthly Adjustment Amount (IRMAA) surcharges. For single filers in 2025, those surcharges start once your income tops $103,000.

RMDs also get counted when figuring out how much of your Social Security benefits are taxable. If your combined income is over $44,000 (for joint filers), up to 85% of your benefits could be taxed.

Strategies for Minimizing Taxes

Some folks take withdrawals before reaching RMD age to spread out their taxable income and maybe stick to lower rates. Converting part of a traditional IRA to a Roth before RMDs kick in can also cut down future taxable distributions—Roth accounts don’t require withdrawals.

Qualified Charitable Distributions (QCDs) let you give up to $100,000 per year straight from your IRA to charity if you’re 70½ or older. It counts toward your RMD but doesn’t show up as taxable income.

Other approaches worth a look:

• Qualified Longevity Annuity Contracts (QLACs) let you defer RMDs on part of your balance until age 85
• Strategic withdrawals during low-income years before you start Social Security
• Getting advice from a tax pro to nail down the best timing for conversions and withdrawals

Penalties and Correction Procedures

Missing a required minimum distribution comes with an excise tax penalty, but the IRS does offer ways to fix the mistake—and maybe even reduce or avoid the penalty if you follow the right steps.

Excise Tax for Missed RMDs

The IRS now charges a 25% excise tax on whatever you didn’t withdraw, down from the old 50%. The penalty is based on the shortfall—the gap between what you should’ve taken and what you actually did.

You’re on the hook for these additional taxes on qualified plans even if it was an honest mistake. If you fix the error within two years and meet the requirements, the penalty can drop to 10%. This lower rate kicks in if you take the missed amount and file the right forms with the IRS.

The excise tax under IRC Section 4974 is your responsibility, not your plan sponsor’s. You pay it when you file your tax return for the year you missed the RMD.

How to Fix Missed RMDs

Withdraw the full missed amount as soon as you spot the problem. Figure out the correct distribution for each year you missed and get those withdrawals done right away.

After you’ve taken the missed distributions, ask the IRS for a penalty waiver by explaining your reasonable cause—maybe illness, a change in custodians, or bad advice from a pro. Make sure you document your reason clearly.

Plan sponsors can use the Employee Plans Compliance Resolution System for 401(k) errors. For IRAs, you’ll handle it directly with the IRS using Form 5329.

Filing IRS Form 5329

IRS Form 5329 is how you report the excise tax and ask for a waiver. You file it with your federal tax return for any year you missed an RMD.

On the form, you’ll list what you should have withdrawn, what you actually took, and the difference. Then you calculate the 25% penalty on that shortfall. In Part IX, you’ll explain why you missed the withdrawal and why the IRS should let you off the hook for the penalty.

You can still file Form 5329 even if you already turned in your tax return for that year—just send an amended return with the form attached. Hang onto records of your missed RMD correction steps, including withdrawal receipts and any correspondence with your financial institution.

Inherited and Beneficiary RMD Rules

Inheriting an IRA or retirement account comes with its own set of distribution rules, which depend on your relationship to the original owner and when they died. The SECURE Act shook up how most beneficiaries have to handle inherited IRAs.

Inherited IRAs and Retirement Plans

When you’re named as a beneficiary of an IRA or retirement plan, you get what’s called an inherited IRA. Required minimum distributions for inherited IRAs are based on whether the original owner died before or after their required beginning date.

If the owner died on or after their required beginning date, you’ll generally have to keep taking distributions. If they died before, the rules change. You can’t treat an inherited IRA as your own unless you’re a surviving spouse—then you get some special options.

The IRS says most IRA beneficiaries must take annual withdrawals from inherited accounts, and these withdrawals are usually taxable. The exact schedule depends on your status as a beneficiary and when you inherited the account.

SECURE Act and 10-Year Rule

The SECURE Act of 2019 killed off the old “stretch IRA” for most people. Now, most non-spouse beneficiaries have to empty the inherited IRA within 10 years of the original owner’s death.

Starting in 2025, some beneficiaries will need to take annual RMDs along with draining the account by the end of year ten—if the original owner had already started RMDs. That means yearly withdrawals during the 10-year window, with everything gone by December 31 of the tenth year after the owner’s death.

The SECURE 2.0 Act tweaked a few things but left the main 10-year rule alone. Some exceptions exist for certain eligible beneficiaries—like disabled or chronically ill folks, or those less than 10 years younger than the original owner.

Beneficiaries: Spouses and Non-Spouses

Your choices as a beneficiary depend on your relationship to the retirement plan account owner. Surviving spouses have the most wiggle room with inherited IRAs.

Surviving Spouse Options:

• Treat the inherited IRA as your own
• Roll it into an existing IRA
• Stay as a beneficiary and take distributions based on your own life expectancy
• Delay withdrawals until the deceased would’ve hit their required beginning date

Non-Spouse Beneficiary Rules:

• Usually must follow the 10-year distribution rule
• Can’t roll the inherited IRA into your own account
• Have to take RMDs if the original owner died after their required beginning date
• Use IRS life expectancy tables to figure out required distributions when needed

Using and Managing Your RMDs

Once you start pulling money from your retirement accounts, you’ve got to decide what to do with it. You might spend it on daily needs, reinvest for growth, donate for tax breaks, or fold it into your larger financial plan.

Spending Versus Reinvesting Withdrawals

You can use your withdrawals to pay for your retirement lifestyle, or—if you don’t need the cash right away—reinvest it elsewhere.

If you need the funds, just deposit them into your checking account or a cash management account to handle bills and expenses. Keeping a budget helps you see if your RMDs will cover your living costs.

Don’t need the money? You can move it to a taxable brokerage account and invest it according to your goals. Some people even consider a shares-in-kind distribution, transferring investments directly instead of cashing out first.

There’s also the option to help out family—like putting RMD funds into a 529 college savings account. It’s a way to support education costs while still meeting your withdrawal requirements.

Qualified Charitable Distributions (QCDs)

A qualified charitable distribution lets you donate money straight from your IRA to a charity before you take your RMD.

The QCD counts toward your RMD requirement for the year, up to $108,000 per person or $216,000 for married couples filing jointly. The donation goes right from your IRA custodian to the charity, so it never touches your taxable income.

You’ll need to be at least 73 to use a QCD, and the charity has to qualify under IRS rules. This is a solid choice if you want to support a cause and shrink your tax bill at the same time.

Charitable Donations and Deductions

QCDs come with unique tax perks that aren’t quite the same as the usual charitable gifts you make from your Required Minimum Distributions cash.

If you take an RMD and then donate that money to charity, you’ll only get a deduction if you itemize on your tax return. Most retirees just go with the standard deduction, so their charitable gifts made with cash don’t give them any tax break at all.

With a QCD, the donation never shows up as income on your tax return in the first place. That’s what makes QCDs especially handy for retirees with higher incomes who use the standard deduction and don’t get any benefit from itemizing donations.

Financial Planning With RMDs

When it comes to weaving RMDs into your overall retirement income plan, working with the right tax advisor makes a real difference. My Personal Tax CPA in Arlington, VA helps you understand how required minimum distributions affect your taxes year after year, not just in isolation but as part of your bigger financial picture and retirement savings.

Our team can calculate your required amounts, coordinate distributions across IRAs and employer plans, and help you set up timely withdrawals so you avoid IRS penalties. We’ll also walk through smart tax-withholding options on each distribution, so you’re not caught off guard at filing time.

Beyond the mechanics, My Personal Tax CPA works with you to align RMDs with your long-term goals—whether that’s maintaining your lifestyle, supporting family, or giving to causes you care about. We can also help evaluate strategies like Roth conversions to reduce future RMDs and explore tax-efficient ways to reinvest or use your distributions based on your comfort level and retirement timeline.

Frequently Asked Questions

The RMD age is now 73. To figure out your distribution, you divide your account balance by a life expectancy factor from the IRS tables. Miss your RMD deadline and you could get hit with a 25% penalty on whatever you didn’t withdraw.

How do I calculate my Required Minimum Distribution?

To calculate your RMD, take your retirement account balance from December 31 of last year and divide it by a life expectancy factor. You’ll find those factors in IRS Publication 590-B.

The IRS has different tables depending on your situation. If your spouse is your only beneficiary and more than 10 years younger, you’ll use the Joint and Last Survivor Table II. Otherwise, most people just use the Uniform Lifetime Table III.

You have to calculate the RMD for each IRA you own, but you don’t have to take a separate withdrawal from every account. You can pull the total from one or several IRAs, whichever’s easier.

What changes were made to Required Minimum Distribution rules for 2025?

The headline change is the RMD starting age: it’s now 73, up from 72.

The penalty for missing an RMD also shifted. If you don’t take your full RMD by the deadline, the penalty is 25% of the amount you missed. If you fix it within two years, the penalty drops to 10%.

At what age must I start taking Required Minimum Distributions from my retirement accounts?

You’ve got to start RMDs from your traditional IRA, SEP IRA, and SIMPLE IRA when you hit 73—even if you’re still working.

If you’re in a workplace retirement plan like a 401(k) or profit-sharing plan, you can actually wait until the year you retire to start RMDs. But this only applies if you’re not a 5% owner of the company sponsoring the plan.

Your first RMD is for the year you turn 73, but you can delay taking it until April 1 of the following year. If you do that, you’ll have to take two RMDs in that second year, so heads up.

How can the Uniform Lifetime Table be used to determine Required Minimum Distributions?

The Uniform Lifetime Table III gives you life expectancy factors to use as divisors for your RMD calculation. You’ll use this table if your spouse isn’t your sole beneficiary or isn’t more than 10 years younger than you.

Just find your age and the matching distribution period number on the table. Divide last year’s December 31 account balance by that number, and that’s your RMD.

Knowing which table to use matters if you want your calculations to be right. The Uniform Lifetime Table assumes your beneficiary is 10 years younger, so it generally means a longer life expectancy and smaller required distributions.

What are the penalties for not taking Required Minimum Distributions when required?

If you don’t take out the full Required Minimum Distributions (RMD) by the deadline, the shortfall gets hit with a 25% excise tax. If you catch and fix the mistake within two years, it drops to 10%.

You’ll need to file Form 5329 with your federal tax return for the year you missed the RMD. Attach a letter that explains what happened.

The IRS might waive the penalty if you can show your mistake was a reasonable error and you’re taking steps to fix it. It’s worth asking—they do sometimes let folks off the hook.

How does the Required Minimum Distribution amount change with different retirement account balances?

Your Required Minimum Distributions (RMD) goes up if your account balance is higher and drops if your balance takes a hit. The number’s always based on what you had in the account as of December 31 from the previous year.

If your investments do well or you add more money, next year’s RMD will be bigger. On the flip side, if the market tanks and your balance drops, your RMD shrinks for the following year.

You can withdraw more than your RMD if you want, but taking extra out now doesn’t let you off the hook for future years. Every year, it’s a fresh calculation.