RMDs · 5 min read

Required Minimum Distributions: A Plain-English Guide for 2026

Tax-deferred accounts are a powerful accumulation vehicle — but the deferral is not permanent. The IRS requires account owners to begin drawing down traditional IRAs, 401(k)s, and most employer plans on a schedule set by federal law. Understanding how required minimum distributions work, when they begin, and how to plan around them can meaningfully affect the taxes you pay across a decade or more of retirement.

When Do RMDs Begin?

The SECURE 2.0 Act changed the starting age in two steps, and both are now in effect.

• Age 73 — applies to anyone born between 1951 and 1959. If you turned 73 in 2026, your required beginning date is April 1, 2027. Every subsequent RMD is due by December 31 of that year.
• Age 75 — applies to anyone born in 1960 or later. The shift to age 75 becomes effective for that cohort starting in 2033. (Schneider Downs, 2026)

First-year deadline note. The April 1 grace period on the first RMD sounds like a gift, but taking two distributions in one calendar year — your delayed first RMD plus the second year's — can push you into a higher bracket or trigger IRMAA surcharges on Medicare premiums. We model both scenarios before advising clients to use the delay.

Accounts covered. RMDs apply to traditional IRAs, rollover IRAs, SEP-IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, and 457(b) governmental plans. Roth IRAs have no lifetime RMD requirement. Effective January 1, 2024, Roth 401(k)s and Roth 403(b)s were also removed from the RMD rules — a meaningful change for households still accumulating in a workplace plan.

How the Calculation Works

The formula is straightforward. Each year's RMD equals:

Prior December 31 account balance ÷ IRS life expectancy factor

The IRS Uniform Lifetime Table (updated in 2022 to reflect longer life expectancies) provides the denominator. Selected factors for 2026: (IRS Publication 590-B)

A few important mechanics:

• Each IRA is calculated separately, but distributions can be aggregated and taken from any one (or combination) of your IRAs.
• Workplace plan balances are calculated and distributed separately from IRA balances — you cannot satisfy a 401(k) RMD with an IRA withdrawal.
• If your sole beneficiary is a spouse more than 10 years younger, the Joint and Last Survivor Table replaces the Uniform Lifetime Table, producing a longer distribution period and a smaller annual RMD.
• Inherited IRA rules differ significantly from owner rules and are outside the scope of this article; consult a qualified adviser.

Penalty Changes: Smaller, but Still Real

Before SECURE 2.0, missing an RMD triggered a 50% excise tax on the shortfall — one of the harshest penalties in the tax code. The law reduced that significantly:

• 25% penalty applies to any RMD shortfall.
• 10% penalty applies if you correct the shortfall by the end of the second tax year after the missed year and file a corrected Form 5329 — a window the IRS calls the "correction period." (MyPlanKeeper, 2026)

The IRS also retains authority to waive the excise tax entirely for reasonable error if you take the missed distribution and attach a written explanation to Form 5329. While the penalty landscape is more forgiving, missing an RMD still generates taxable income in a compressed window, which can cascade into bracket, IRMAA, and Social Security taxation issues. Staying current is the cleaner path.

Qualified Charitable Distributions: The Most Efficient RMD Tool

A qualified charitable distribution (QCD) allows IRA owners aged 70½ or older to transfer money directly from an IRA to a qualified 501(c)(3) charity. It counts toward satisfying the RMD but is excluded from taxable income — unlike a regular distribution followed by a charitable deduction, which is subject to AGI limitations.

2026 QCD limit: $111,000 per individual ($222,000 for a married couple where each spouse has their own IRA). This limit is now indexed to inflation annually. (USTax Tools, 2026)

The QCD advantage is greatest for households that:

• Take the standard deduction (making itemized charitable deductions unavailable)
• Are sensitive to IRMAA thresholds, where higher MAGI increases Medicare Part B and D premiums
• Face Social Security inclusion rates that rise with income

One mechanical requirement: the distribution must go directly from the IRA custodian to the charity. A check made payable to you — even if you forward it to the charity — does not qualify.

Strategies to Reduce Future RMDs

The size of an RMD is determined entirely by the account balance and age. Reducing the balance in tax-deferred accounts before RMDs begin — or while they are still modest — is the primary lever.

Roth conversions before RMDs begin. Converting a portion of a traditional IRA to a Roth IRA in the years between retirement and the required beginning date reduces the balance subject to future RMDs. The Roth itself has no lifetime RMD requirement. The optimal pace fills lower tax brackets each year without crossing IRMAA thresholds or triggering Social Security inclusion increases. Note: once you reach the RMD starting age, you must take the year's RMD first; only the remaining balance is eligible for conversion.

Aggregate-and-redirect strategy. Using QCDs to satisfy RMDs each year keeps the distributed amount out of AGI, which compounds favorably: lower AGI can reduce IRMAA surcharges, lower the taxable portion of Social Security benefits (up to 85% of which is includable), and preserve eligibility for income-tested benefits.

Coordinate with Social Security claiming. Delaying Social Security to age 70 increases the monthly benefit and may allow more pre-RMD income to come from lower-taxed sources, preserving headroom for Roth conversions.

Review beneficiary designations. A spouse more than 10 years younger triggers the Joint and Last Survivor Table, reducing annual RMDs. More broadly, designated beneficiaries (versus no beneficiary or an estate) affect post-death distribution rules — a planning consideration that belongs in every estate review.

We work through each of these options within the full picture of a household's tax situation — bracket trajectory, Social Security timing, Medicare enrollment, and estate objectives — because no single strategy is right in isolation.

Frequently Asked Questions

Q: Do I have to take my first RMD in the year I turn 73, or can I wait?

You can delay your first RMD until April 1 of the calendar year following the year you turn 73. However, doing so means taking two distributions in that second year — the delayed first RMD and the normal second-year RMD — both of which are taxable. Whether the delay makes sense depends on your income in each year; it is worth modeling before deciding.

Q: I have three IRAs. Do I take three separate RMDs?

You calculate the RMD separately for each IRA, but you can then aggregate those amounts and satisfy the total from any one or combination of your IRAs. Workplace plan balances (401(k), 403(b)) must be withdrawn separately from the plan that holds them and cannot be combined with IRA withdrawals.

Q: Can I convert my RMD to a Roth IRA?

No. An RMD cannot be rolled over or converted to a Roth. Once you reach your required beginning date, you must satisfy the year's RMD first. Any amount above the RMD can be converted, subject to ordinary income taxes in the year of conversion.

Q: I missed last year's RMD. What do I do?

Take the missed distribution as soon as possible, report it on Form 5329, and attach a written explanation requesting a penalty waiver. If you correct the shortfall within the two-year correction period, the penalty drops from 25% to 10%. The IRS also has discretion to waive the penalty entirely for reasonable error. A tax professional can help you file the correction properly.

Q: Does a QCD count toward my RMD?

Yes. A QCD made before December 31 counts toward satisfying your RMD for that year, up to the $111,000 annual limit (2026). The amount transferred directly to the charity is excluded from your taxable income. The QCD must go directly from the IRA custodian to the charity; you cannot receive the funds first.

The views and opinions expressed here are those of The Financial Sciences Company as of the publish date and are provided for informational and educational purposes only. They are not personalized investment, tax, or legal advice. The Financial Sciences Company, LLC is an investment adviser registered with the State of Texas. Registration does not imply a certain level of skill or training. Additional information is available in our Form ADV at adviserinfo.sec.gov.

General educational information, current as of 2026. Not personalized investment, tax, or legal advice — figures and rules change. For guidance specific to your situation, talk to a qualified professional.