Required Minimum Distributions (RMDs): The Complete 2026 Guide

RMDs at a Glance

What Is a Required Minimum Distribution?

A Required Minimum Distribution (RMD) is the minimum amount the IRS forces you to withdraw each year from most tax-deferred retirement accounts, starting at a set age. The government let your contributions and growth compound tax-deferred for decades — RMDs are the mechanism that eventually collects tax on that money, whether or not you actually need the cash.

Under the SECURE 2.0 Act (signed into law in December 2022), the RMD starting age moved from 72 to 73 for anyone reaching 72 after 2022, and it will rise again to 75 starting in 2033 for those born in 1960 or later. This has been a moving target for several years — the original SECURE Act (2019) had already raised it from 70½ to 72 — so it's worth confirming your own starting age based on your birth year rather than assuming.

How the Uniform Lifetime Table Calculates Your RMD

Your RMD is calculated with a simple formula: take your account balance as of December 31 of the prior year, and divide it by a "distribution period" from the IRS Uniform Lifetime Table (the table almost everyone uses, unless a spouse more than 10 years younger is the sole beneficiary). The divisor shrinks every year as you age, forcing a larger percentage of the account out annually.

The dollar amount roughly doubles from age 73 to age 100 on the same starting balance, purely because the IRS divisor shrinks from 26.5 down to 6.4 — a mechanical reflection of shortening life expectancy.

Which Accounts Require RMDs — and Which Don't

The Penalty for Missing an RMD

Before 2023, failing to take a full RMD triggered one of the harshest penalties anywhere in the tax code: a 50% excise tax on the shortfall. SECURE 2.0 cut that to 25% starting in 2023, and further down to 10% if you correct the mistake within a defined correction window (generally by the end of the second tax year following the year the RMD was due) by withdrawing the missed amount and filing IRS Form 5329.

The IRS has also historically granted reasonable-cause waivers for genuine errors (a custodian mistake, a serious illness, incorrect advice) — filing Form 5329 with a letter explaining the error and showing it was corrected as soon as discovered often results in a full penalty waiver, though it's never guaranteed.

Qualified Charitable Distributions: Satisfying Your RMD Tax-Free

If you're 70½ or older, a Qualified Charitable Distribution (QCD) lets you transfer IRA funds directly to a qualified 501(c)(3) charity — up to $108,000 per person in 2026 (indexed annually for inflation). The distribution counts toward satisfying your RMD for the year, but unlike a normal withdrawal, it's excluded from your taxable income entirely, rather than being included in income and then deducted as a charitable contribution.

This matters even for taxpayers who itemize, because a QCD lowers your AGI and MAGI directly — which can help you stay under thresholds for the Net Investment Income Tax, avoid a higher Medicare IRMAA tier, and reduce the taxable portion of Social Security benefits, none of which a standard charitable deduction accomplishes on its own.

• The check must go directly from the IRA custodian to the charity — funds that pass through your hands first don't qualify
• QCDs are only available from IRAs, not directly from 401(k)s (though you can roll a 401(k) into an IRA first, subject to plan rules)
• A QCD cannot go to a donor-advised fund, private foundation, or supporting organization — see our guide on donor-advised funds for the appropriate use case for those vehicles instead
• You can combine a QCD with the RMD-and-reinvest strategy below for the portion of your RMD you don't want to give away

RMD-and-Reinvest: What to Do With Money You Don't Need

Many retirees don't actually need to spend their RMD — Social Security, a pension, or other income already covers living expenses. In that case, the standard approach is simple: take the RMD (it's mandatory regardless of need), pay the ordinary income tax due, and reinvest whatever's left in a taxable brokerage account.

• Favor tax-efficient holdings in the reinvestment account — broad index ETFs and qualified-dividend stocks generate less annual taxable income than actively managed funds or high-turnover strategies
• Withhold enough tax at the time of the RMD (many custodians default to 10% federal withholding, but you can request more) to avoid an underpayment penalty at filing time
• Consider using the RMD itself, rather than other savings, to fund 529 contributions for grandchildren or other gifting goals if the money isn't needed for living expenses
• If part of the balance is earmarked for giving, a QCD (above) is more tax-efficient than withdrawing, paying tax, and then donating cash

Inherited IRA RMD Rules

The SECURE Act (2019) fundamentally changed inherited IRA rules for deaths occurring in 2020 or later. Most non-spouse beneficiaries are now "non-eligible designated beneficiaries" subject to the 10-year rule: the entire inherited account must be fully distributed by December 31 of the 10th year after the original owner's death. If the original owner had already started taking RMDs before death, current IRS guidance requires the beneficiary to also take annual RMDs during years 1–9, not just empty the account in year 10.

• Eligible designated beneficiaries — a surviving spouse, a minor child of the account owner (until they reach majority), a disabled or chronically ill individual, or someone no more than 10 years younger than the deceased — can generally still stretch distributions over their own life expectancy instead of the 10-year rule
• A surviving spouse has the most flexibility: they can roll the inherited IRA into their own IRA, treat it as their own, or remain a beneficiary, each with different RMD implications
• Inherited Roth IRAs are still subject to the 10-year rule for non-eligible beneficiaries, but the withdrawals themselves remain income-tax-free — only the timing rule applies, not a tax bill
• Missing an inherited IRA's required annual distribution carries the same 25%/10% excise tax penalty structure as an owner's own RMD

How RMDs Interact With Other Taxes in Retirement

RMDs are taxed as ordinary income, and because they're often unavoidable and can be large, they frequently push retirees into tax situations they didn't anticipate:

• Net Investment Income Tax: RMDs themselves are excluded from NII (see our full NIIT guide), but by raising your MAGI, a large RMD can push other investment income — dividends, capital gains in a taxable account — over the $200K/$250K NIIT threshold for the first time.
• Medicare IRMAA surcharges: Medicare Part B and Part D premiums are based on your MAGI from two years earlier, using tiered brackets. An RMD that spikes your income in one year can trigger a higher IRMAA surcharge two years later, sometimes adding thousands per year in extra premiums for a couple.
• Social Security taxation: up to 85% of Social Security benefits become taxable once combined income (AGI + nontaxable interest + half of Social Security) crosses IRS thresholds — RMD income counts fully toward this calculation.
• State income tax: RMDs are taxable in most states with an income tax, though a handful of states offer exemptions or credits for retirement account withdrawals — worth checking before assuming your RMD tax bill is purely federal.

Because of these compounding effects, many pre-retirees use the years between retirement and RMD age — often a lower-income window — to do partial Roth conversions, deliberately paying tax at a lower rate now to shrink the pre-tax balance that will eventually force out RMDs later.

Frequently Asked Questions

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