Mainstreet Financial Education · Tax Year 2026
At a certain age the IRS sets a minimum you must withdraw from traditional retirement accounts each year. It counts as taxable income whether you need the money or not. Here is how the math works, and what you still control.
For decades, the money in a traditional IRA or 401(k) grows without being taxed. You deducted the contributions, and the gains compounded untouched. A required minimum distribution, or RMD, is how the IRS finally collects that deferred tax. Starting at your required age, you must withdraw at least a set amount each year, and that amount is added to your taxable income.
The rule applies to traditional IRAs, SEP and SIMPLE IRAs, and most workplace plans like 401(k)s and 403(b)s. Roth IRAs carry no RMD during your lifetime, and as of 2024 designated Roth accounts inside a workplace plan no longer do either.
You may delay only your very first RMD until April 1 of the following year. Doing so stacks two distributions into one tax year, which can push you into a higher bracket and raise Medicare premiums two years later. Most people take the first one on the normal December 31 schedule for that reason.
Take your account balance from December 31 of the prior year and divide it by a life-expectancy factor the IRS publishes for your age. Each year the factor gets smaller, so the required percentage of your balance slowly rises.
These are the IRS Uniform Lifetime Table factors, used by most account owners. The percentage column shows roughly how much of the balance the RMD represents at each age.
| Age | Life-expectancy factor | Approx. % of balance |
|---|---|---|
| 73 | 26.5 | 3.8% |
| 75 | 24.6 | 4.1% |
| 80 | 20.2 | 5.0% |
| 85 | 16.0 | 6.3% |
| 90 | 12.2 | 8.2% |
If your sole beneficiary is a spouse more than ten years younger than you, a different IRS table applies and produces a larger factor, which lowers the required amount. The example above assumes the standard table.
The RMD is a floor, not a ceiling. In a low-income year, drawing extra on purpose can fill up a low bracket cheaply and shrink future required amounts.
Money moved to a Roth IRA before RMDs begin carries no future required distribution. Converting in your lower-income years lowers every forced withdrawal that would have followed.
From age 70½, you can send up to $108,000 in 2026 directly from an IRA to a qualified charity. It counts toward your RMD and stays out of your taxable income entirely, which can also help with Medicare and Social Security thresholds.
If you are still employed past your RMD age and own no more than 5% of the company, you can usually delay RMDs from that current employer's plan until you retire. Old 401(k)s and IRAs still require them.
Skip or underpay an RMD and the IRS applies an excise tax of 25% of the shortfall. Correct it within two years and that drops to 10%. The amounts are real, but the mistake is almost always avoidable with a calendar and a plan.
An RMD is not a single-year event. It is a stream of taxable income that arrives every year for the rest of your life and lands on top of Social Security, pensions, and any other withdrawals. The years before yours begin are when the most can be done about it, which is exactly why we map them early rather than waiting for the first letter from the custodian.
The window to shape your RMDs is before they start.
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