Learn About Required Minimum Distributions for 2026

Understanding Required Minimum Distributions and the SECURE Act 2.0 Changes

Required Minimum Distributions, commonly called RMDs, are the amounts that people with certain retirement accounts must withdraw each year once they reach a specific age. For decades, the RMD age was 70½, but the SECURE Act 2.0, which took effect in 2023, changed this timeline. Starting in 2023, the age increased to 73, and it will increase again to 75 in 2033 for people born in 1960 or later.

The purpose of RMDs is straightforward: the government allowed people to set aside money in retirement accounts without paying taxes on the earnings during their working years. Once retirement arrives, the government wants to begin collecting taxes on those earnings. RMDs ensure that people don't simply leave these accounts untouched indefinitely, avoiding taxes forever.

For 2026, understanding RMDs matters because the rules have already shifted from the old system. Anyone born before 1951 has likely been taking RMDs for several years already. People born between 1951 and 1952 will turn 75 in 2026 or have already done so, which affects their RMD calculations. People born in 1953 turned 73 in 2026 and must begin RMDs that year.

The types of accounts subject to RMDs include traditional IRAs, SEP IRAs, SIMPLE IRAs, traditional 401(k)s, 403(b)s, and similar workplace retirement plans. Roth IRAs have different rules—the original account owner typically does not face RMDs during their lifetime, though beneficiaries do after inheritance. This distinction matters significantly for planning purposes.

Practical takeaway: Determine your birth year to understand whether you currently face RMDs in 2026 or will begin them soon. Review which retirement accounts you own, as different account types have different RMD rules. This baseline knowledge helps you plan withdrawals before your RMD age arrives.

How RMD Calculations Work for 2026

The basic RMD formula involves two numbers: your account balance and your life expectancy factor. The IRS publishes life expectancy tables updated regularly that assign a divisor based on your age and account type. You divide your account balance as of December 31 of the prior year by this divisor to calculate your RMD for the current year.

For example, suppose a person turns 75 in 2026 and has a traditional IRA balance of $300,000 on December 31, 2025. The IRS life expectancy divisor for age 75 using the Uniform Lifetime Table is 24.6. Dividing $300,000 by 24.6 equals approximately $12,195. This person must withdraw at least $12,195 from their IRA during 2026, or face significant tax penalties.

The Uniform Lifetime Table applies to most people. However, if your spouse is more than 10 years younger than you and is the sole beneficiary of your account, you may use the Joint and Survivor Table, which has lower divisors and results in smaller RMDs. This exception can provide meaningful tax advantages for couples with significant age gaps.

For workplace retirement plans like 401(k)s, the calculation follows the same principle, but you must check your plan documents, as some plans have specific RMD rules. If you still work and do not own more than 5% of the company, you may be able to delay RMDs from that particular employer's plan until retirement, though you cannot delay RMDs from other IRAs or accounts.

The IRS provides Worksheet 1, Worksheet 2, and other calculation tools in Publication 590-B to help people work through RMD calculations. Many financial institutions also calculate RMDs automatically for account holders and display the amount in account statements. Some people prefer to work with tax professionals or financial advisors to ensure accuracy, particularly when managing multiple accounts.

Practical takeaway: Gather your account statements from December 31, 2025, locate the applicable IRS life expectancy table for your age in 2026, and perform the division calculation. If you have multiple accounts, calculate the RMD for each separately, though you may aggregate IRAs and withdraw the total from one account if preferred.

Deadline, Penalties, and Consequences of Missing RMDs

The RMD deadline for 2026 is December 31, 2026. This means you must complete the entire withdrawal by the last day of the calendar year. Unlike some tax deadlines that move when they fall on weekends or holidays, the RMD deadline remains December 31 regardless of what day of the week it falls on.

There is one exception to this annual deadline: the first RMD. If you are required to take your first RMD in 2026, you have the option to delay that first withdrawal until April 1, 2027. However, this delay means you will have two RMDs due in 2027: the first RMD (for 2026) and the second RMD (for 2027). This can create a larger taxable income in 2027, potentially pushing you into a higher tax bracket. For this reason, many people choose to take their first RMD in the year they turn the RMD age rather than delay it.

The penalty for missing an RMD is severe. Prior to 2023, the penalty was 50% of the amount you failed to withdraw. The SECURE Act 2.0 reduced this to 25% for most cases, dropping to 10% if you correct the error within two years. To correct an error, you must withdraw the shortfall and file Form 5329 with the IRS explaining what happened. Even with the reduced penalties, missing an RMD is expensive and should be avoided.

Beyond the immediate penalty, a missed RMD creates tax complications. The amount you were supposed to withdraw is still considered taxable income by the IRS, even if you did not actually withdraw it. This means you owe income tax on the full RMD amount plus the penalty tax. Some people attempt to correct missed RMDs years later, but this can trigger audits and additional complications.

For those with multiple retirement accounts, the consequences are particularly important. Each account typically requires its own RMD calculation. Failing to withdraw from one account while properly withdrawing from another does not satisfy your obligations. The IRS tracks RMDs by account and applies penalties individually.

Practical takeaway: Mark December 31, 2026, on your calendar as a firm deadline. Set reminders in September or October to ensure you have time to arrange withdrawals. If 2026 is your first RMD year, carefully consider whether delaying to April 1, 2027, makes sense for your tax situation by consulting a tax professional.

Strategies for Managing RMDs and Tax Implications

One common strategy is the Qualified Charitable Distribution, or QCD. If you are age 70½ or older and are charitably inclined, you can direct up to $100,000 per year from your IRA directly to a qualified charity. This distribution counts toward your RMD but is not included in your taxable income. For someone in a higher tax bracket, this can save significant money. For example, a $15,000 QCD at a 24% tax rate saves $3,600 in taxes while satisfying your RMD obligation.

Another approach involves the order in which you withdraw from multiple accounts. If you have both a traditional IRA and a workplace 401(k), you must calculate RMDs for each separately. However, some retirement plan custodians allow you to aggregate IRAs when calculating the total RMD amount, even if you hold them at different institutions. You can then withdraw the entire aggregated amount from a single IRA if you prefer. This flexibility can help with managing cash flow and account balances strategically.

Roth conversion strategies can interact with RMDs in complex ways. Converting money from a traditional IRA to a Roth IRA counts as a withdrawal and reduces your traditional IRA balance, which lowers future RMDs. However, the conversion itself is taxable in the year it occurs. For someone with low-income years or before RMDs begin, conversions may reduce lifetime taxes. This strategy requires careful planning and varies significantly based on individual circumstances.

The timing of withdrawals within the year offers flexibility.