Required Minimum Distributions: IRA and Retirement Plan Rules
Required minimum distributions, or RMDs, are a key IRS rule for traditional IRAs and many retirement plans once you reach a certain age. Understanding when they start and how they’re calculated can help you avoid penalties and keep your retirement savings on track.
By: Mary Mitchell on August 2, 2026
Required minimum distributions, often called RMDs, are one of the most important rules to understand when saving for retirement. If you have a traditional IRA, a 401(k), or another tax-deferred retirement account, the IRS eventually requires you to withdraw money each year once you reach a certain age. Missing a required minimum distribution can lead to costly penalties, so it pays to know how the rules work before retirement arrives.
This guide breaks down required minimum distributions for IRAs and retirement plans in plain English. You’ll learn when RMDs begin, how they’re calculated, which accounts are affected, and how to avoid common mistakes.
What Are Required Minimum Distributions?
Required minimum distributions are the minimum amounts you must withdraw each year from certain retirement accounts after you reach the IRS-mandated starting age. These rules apply because retirement accounts like traditional IRAs and employer-sponsored plans are funded with pre-tax dollars or tax-deferred contributions. Since the government has allowed those funds to grow without current taxation, it eventually requires withdrawals so the money can be taxed.
Why RMDs Exist
The IRS uses RMD rules to ensure retirement accounts are eventually used for retirement income rather than left untouched indefinitely. In practical terms, RMDs help the government collect tax revenue on money that has grown tax-deferred for years.
Accounts Commonly Subject to RMDs
RMDs generally apply to:
Traditional IRAs
SEP IRAs
SIMPLE IRAs
401(k) plans
403(b) plans
457(b) plans
Roth accounts follow different rules, which is one reason many savers use them strategically.
Required Minimum Distributions Rules for IRAs and Retirement Plans
The rules for required minimum distributions depend on the type of account you own and whether you are still working. Although the core concept is the same, the timing and exceptions can differ.
When RMDs Begin
For many retirees, the starting age for RMDs is now 73. Under current law, people who reach the applicable age must begin taking distributions by April 1 of the year following the year they reach that age. Your first distribution can be delayed until that deadline, but doing so usually means taking two taxable withdrawals in the same calendar year.
Because retirement law can change, it’s wise to confirm your specific age requirement based on your birth year and current IRS guidance.
The April 1 Rule
If you take your first RMD in the year after you reach the starting age, that first withdrawal must be completed by April 1. After that, every annual RMD must be taken by December 31.
This creates an important planning decision:
Take the first RMD in the year you become eligible, or
Wait until the following year, then take two distributions in one tax year
For some retirees, delaying the first distribution can make sense. For others, it can increase taxable income in a single year and push them into a higher tax bracket.
Who Must Take RMDs
RMDs are required from:
Traditional IRA owners once they reach the required age
Beneficiaries who inherit certain retirement accounts
Employees in workplace retirement plans, unless an exception applies
Roth IRAs are the major exception for original account owners: they do not require RMDs during the owner’s lifetime.
How RMDs Are Calculated
The IRS uses a straightforward formula to determine the annual required minimum distribution. In most cases, you divide the account balance at the end of the previous year by a life expectancy factor from an IRS table.
Basic Formula
RMD = Prior year-end account balance ÷ distribution period
For example, if your IRA balance on December 31 was $500,000 and your distribution period is 25.6, your required withdrawal would be about $19,531.
IRS Life Expectancy Tables
The IRS publishes tables that help determine your distribution period. The table you use depends on your situation:
Uniform Lifetime Table: Most account owners use this for their own IRAs and workplace retirement plans
Joint and Last Survivor Table: Used in some cases if your spouse is the sole beneficiary and is more than 10 years younger
Single Life Expectancy Table: Common for inherited retirement accounts
Because the correct table matters, it’s important to verify which one applies before taking your withdrawal.
Multiple Accounts, Separate Rules
The RMD calculation works differently depending on the type of account:
Traditional IRAs: You calculate each IRA separately, then you may usually total the RMDs and take the combined amount from one or more IRAs
401(k)s and similar plans: RMDs must usually be taken separately from each plan
403(b)s: Similar to IRAs in some cases, but account aggregation rules may vary
If you own several retirement accounts, it’s easy to overlook one. A missed RMD can be expensive, so careful tracking matters.
Required Minimum Distributions for IRAs
IRAs are often the easiest accounts to manage for RMD purposes, but they still require attention.
Traditional IRA RMDs
Traditional IRAs are subject to RMDs once you reach the required age. Each IRA has its own balance, but you may generally aggregate the RMDs across all traditional IRAs and withdraw the total from one or more of them.
That flexibility can be useful if one IRA is held in cash and another is invested more aggressively.
SEP and SIMPLE IRA RMDs
SEP IRAs and SIMPLE IRAs follow the same RMD framework as traditional IRAs. Even if you are still contributing to a SEP or SIMPLE plan through work, once you reach the RMD starting age, distribution rules kick in.
Roth IRA RMD Rules
Roth IRAs are different. The original account owner does not have to take RMDs during life. That makes Roth IRAs especially valuable for:
Tax-efficient retirement income planning
Long-term wealth transfer
Reducing required taxable withdrawals from other accounts
However, inherited Roth IRAs can still be subject to distribution rules for beneficiaries.
Required Minimum Distributions for Retirement Plans
Employer-sponsored retirement plans also have RMD requirements, though the rules can vary by plan type.
401(k), 403(b), and Similar Plans
Once you reach the RMD starting age, you generally must begin taking withdrawals from most workplace retirement plans. Unlike IRAs, you typically cannot combine balances from separate employer plans for one distribution. Each plan usually has its own required withdrawal.
The Still-Working Exception
Some plans allow a “still-working” exception. If you are still employed by the company sponsoring the plan and you do not own more than 5% of the business, you may be able to delay RMDs from that specific plan until you retire.
This exception does not apply to IRAs.
Special Considerations for 403(b) Plans
403(b) plans, commonly used by nonprofits and schools, have some unique aggregation rules in certain cases. Participants should review the plan’s rules carefully or speak with the plan administrator.
Inherited Accounts and Beneficiary Rules
When retirement accounts pass to heirs, the RMD rules change. Beneficiaries must follow a separate set of distribution requirements based on their relationship to the original account owner and the year the account was inherited.
Eligible Designated Beneficiaries
Certain beneficiaries may qualify for more flexible withdrawal timelines, including:
Surviving spouses
Minor children of the account owner
Disabled or chronically ill individuals
Beneficiaries not more than 10 years younger than the decedent
These categories may have more favorable rules than other beneficiaries.
The 10-Year Rule
Many non-spouse beneficiaries now must empty inherited retirement accounts within 10 years of the original owner’s death. In some cases, annual distributions may also be required during that period, depending on the account and timing.
Because inherited IRA rules can be complex and have changed in recent years, beneficiaries should confirm the applicable rules before taking withdrawals.
Tax Impact of Required Minimum Distributions
RMDs are usually taxable as ordinary income unless the funds come from a Roth account or another tax-free source. That means your required withdrawal can affect more than just your bank balance.
How RMDs Can Affect Your Taxes
Taking an RMD may:
Increase your taxable income
Push you into a higher federal tax bracket
Affect Medicare premiums
Impact the taxation of Social Security benefits
For retirees with multiple income sources, it’s smart to map out RMDs alongside pension income, dividends, and Social Security.
Withholding and Estimated Taxes
You can choose to have federal taxes withheld from an RMD. That can help avoid a surprise tax bill at filing time. In some cases, retirees may also need to make estimated tax payments if withholding is not enough.
Qualified Charitable Distributions
If you are age 70½ or older, you may be able to make a qualified charitable distribution from your IRA directly to a qualified charity. A QCD can count toward your RMD and may reduce taxable income. This strategy can be especially useful for retirees who give to charity regularly.
Common Mistakes to Avoid
Even careful savers sometimes make RMD errors. A few small oversights can create unnecessary tax problems.
1. Forgetting a Small Account
It’s easy to miss an old IRA or a leftover 401(k). Keep a complete inventory of your retirement accounts so no RMD is overlooked.
2. Using the Wrong Balance
RMDs are based on the account value from the previous December 31, not the current balance. Using the wrong date can lead to an incorrect withdrawal amount.
3. Missing the Deadline
The deadline for annual RMDs is generally December 31. Missing it can trigger penalties, so set reminders well in advance.
4. Assuming Roth Accounts Have RMDs
Original Roth IRA owners do not have RMDs, but inherited Roth IRAs may still have distribution rules. Don’t assume every Roth account is exempt.
5. Ignoring Tax Planning
Taking the minimum required amount may satisfy the IRS, but it may not be the best tax move. Sometimes it makes sense to withdraw more in a lower-income year or convert part of an IRA to a Roth before RMDs begin.
Practical Planning Tips
Good RMD planning can help preserve flexibility and reduce tax stress.
Review Accounts Before Year-End
Check balances, beneficiaries, and plan rules each fall so you have time to make adjustments before the deadline.
Coordinate Withdrawals With Other Income
If you expect a large pension payment, capital gains, or other taxable income, your RMD may deserve special planning.
Consider Roth Conversions Early
Before RMDs start, some retirees choose to convert part of a traditional IRA to a Roth IRA. This can reduce future RMDs, though conversions themselves are taxable.
Talk to a Financial or Tax Professional
If you have multiple accounts, inherited assets, or a complicated tax situation, professional guidance can help you avoid mistakes and identify better withdrawal strategies.
Frequently Asked Questions
What are required minimum distributions?
Required minimum distributions are mandatory annual withdrawals from certain tax-deferred retirement accounts, such as traditional IRAs and many employer-sponsored retirement plans, once you reach the IRS starting age.
Do Roth IRAs have RMDs?
Original Roth IRA owners do not have RMDs during their lifetime. However, beneficiaries who inherit a Roth IRA may be subject to distribution rules.
Can I take my RMD from one IRA instead of several?
Yes. For traditional IRAs, you generally calculate each IRA separately but may take the total RMD from one or more IRAs. This aggregation rule usually does not apply to workplace retirement plans like 401(k)s.
What happens if I miss my RMD?
Missing an RMD can result in IRS penalties. If you realize a mistake, take the required withdrawal as soon as possible and consult a tax professional about how to correct the error.
Are RMDs taxed as ordinary income?
Yes, in most cases RMDs from traditional IRAs and tax-deferred retirement plans are taxed as ordinary income. Roth IRA distributions for original owners are generally tax-free if qualified.
Understanding required minimum distributions is a key part of retirement planning. Once you know which accounts are affected, when withdrawals must begin, and how the IRS calculates the amount, the process becomes much easier to manage. The most important thing is to stay organized: track your account balances, confirm the correct distribution rules, and pay attention to deadlines well before year-end.
RMDs can influence your taxes, your spending plan, and even your broader retirement strategy. For some savers, the best move is simply to take the required amount on time. For others, there may be smart opportunities to coordinate withdrawals, use qualified charitable distributions, or plan Roth conversions before RMDs begin.
The earlier you prepare, the more control you keep. Review your retirement accounts, verify beneficiary designations, and make sure you understand which rules apply to your situation. A little planning now can help you avoid penalties later and make your retirement income work more efficiently for you.
Mary S, CFP®, is a Certified Financial Planner with over 12 years of experience in personal finance, retirement planning, and wealth management. She writes educational content that helps readers understand financial concepts and make informed decisions based on reliable information.
