Required Minimum Distributions Explained — What You Owe and When

RMDs have gotten complicated with all the rule changes and conflicting information flying around. As someone who spent three years helping my parents untangle their retirement accounts, I learned everything there is to know about required minimum distributions — mostly because I had to. My father would sit at the kitchen table staring at IRS Publication 590-B like it was written in a foreign language. Honestly, it kind of is. But the underlying rules? Not that bad once you strip away the bureaucratic crust. By the time you finish reading this, you’ll know when the IRS expects you to start pulling money out, how much they want, and what happens if you don’t.

When You Must Start Taking RMDs — The Age Rules

The starting age for RMDs shifted recently, and a surprising number of people are still working off the old numbers. Here’s where things actually stand.

Born between 1951 and 1959? Your RMD starting age is 73. Born in 1960 or later? You get until 75. The SECURE 2.0 Act pushed these ages up from the previous rule of 72 — which itself replaced the even older rule of 70½. The government keeps moving the goalposts. In your favor this time, at least. But still.

The First-Year Deadline

Your first RMD must be taken by April 1 of the year after you reach your applicable age. Turn 73 in 2024? Your first deadline is April 1, 2025. Sounds generous. It isn’t — not really.

Here’s the trap nobody warns you about. Your second RMD is due by December 31 of that same year. So in 2025, you’d be taking two full RMDs — one by April 1, one by December 31. Two taxable distributions landing in a single calendar year. That can push you into a higher bracket, trigger higher Medicare premiums, and turn April into a genuinely miserable month. I call it the double-RMD trap. It catches people off guard constantly — my parents almost fell into it.

The smarter move for most people is taking that first RMD before December 31 of the year you actually hit your applicable age. Don’t wait for the April 1 extension. Yes, you’re paying taxes a few months earlier. But you’re avoiding a pile-up that’ll probably cost more than the delay ever saved you.

Every RMD after the first is due by December 31 of that calendar year. No extensions. No grace periods. Deadline’s the deadline.

How to Calculate Your RMD

The math is genuinely not that bad. Two numbers — your account balance and an IRS life expectancy factor. That’s the whole thing.

The formula: Prior year December 31 account balance ÷ IRS life expectancy factor = your RMD

You use whatever your account balance was on December 31 of the previous year. If your IRA held $500,000 on December 31, 2024, that’s the number powering your 2025 RMD calculation.

Walking Through a Real Example

Say you’re 73, and your traditional IRA balance on December 31, 2024 was $500,000. The IRS Uniform Lifetime Table — the one most people use — lists a life expectancy factor of 26.5 for age 73.

$500,000 ÷ 26.5 = $18,867.92

That’s your 2025 RMD. Just under $19,000 you must withdraw and report as ordinary income.

Same age-73 factor applied across different account sizes:

• $250,000 balance → $250,000 ÷ 26.5 = $9,434
• $500,000 balance → $500,000 ÷ 26.5 = $18,868
• $1,000,000 balance → $1,000,000 ÷ 26.5 = $37,736
• $2,000,000 balance → $2,000,000 ÷ 26.5 = $75,472

The factor shrinks as you age — which means the percentage you’re required to withdraw keeps climbing. At 80, the factor is 20.2. At 85, it’s 16.0. The IRS is essentially saying, actuarially, that your time horizon is shorter. Draw down faster. Not a comfortable message, but that’s the logic.

Where to Find the Official IRS Factors

The table you want is the Uniform Lifetime Table in IRS Publication 590-B, Appendix B. One exception worth knowing: if your sole beneficiary is a spouse more than 10 years younger than you, use the Joint Life and Last Survivor Expectancy Table instead — it gives you a lower distribution requirement. Probably worth a look if that describes your situation.

Your IRA custodian — Fidelity, Vanguard, Schwab, whoever’s holding the account — is actually required to either calculate your RMD or offer to do it. Most send a statement with the number right on it. Use it as a sanity check. But verify the math yourself at least once. Don’t make my mistake — I just trusted the number in year one without checking it. It was correct, but that was luck, not diligence.

What Happens If You Miss an RMD

Missing an RMD is expensive. The penalty used to be 50% of whatever you failed to withdraw. SECURE 2.0 knocked it down to 25%. Still brutal.

Missed a $18,868 RMD entirely? That’s $4,717 in penalties — on top of the income tax you’ll owe when you eventually take the distribution. Miss it two years running and you’re writing two very painful checks to the IRS.

The Two-Year Correction Window

Here’s where it gets slightly less awful. Catch the mistake and fix it within two years — meaning you actually take the missed RMD — and the penalty drops to 10%. Miss your 2024 RMD and correct it in 2025 or 2026? That $4,717 penalty becomes $1,887. Still not free money. But meaningfully better than doing nothing.

How to Correct a Missed RMD

Three steps. First, take the missed distribution as soon as you realize the error. Second, file IRS Form 5329 for the year it was missed. Third, attach a letter to your return requesting a penalty waiver and explaining what happened. The IRS has historically been reasonable about first-time mistakes — especially with a straightforward, good-faith explanation. “I misunderstood the rules” has worked. “I forgot” has worked. What doesn’t work is ignoring it and hoping they miss it.

Probably should have opened with this section, honestly — because the fear of penalties is usually what sends people searching for RMD information in the first place. The good news is the correction process is real, and it actually works.

Strategies to Minimize RMD Tax Impact

Every dollar you pull out is ordinary income. That’s the deal. But there are legitimate ways to reduce how much of that income actually hits your return — and some of the best options are genuinely underused.

Qualified Charitable Distributions — the QCD

But what is a QCD? In essence, it’s a direct transfer from your IRA to a qualified charity. But it’s much more than that — it’s probably the most underused tax move available to retirees who give to charity.

If you’re 70½ or older, a QCD lets you send money directly from your IRA to a qualified charity — up to $105,000 per person in 2024, a number now indexed for inflation. The transferred amount counts toward your RMD but gets excluded from your taxable income entirely.

Think about what that actually means. Instead of taking an $18,868 RMD, reporting it as income, then writing a separate check to your church or a nonprofit — you send $18,868 directly from the IRA to the charity, satisfy your RMD, and report none of it as income. The charity gets the same amount. Your tax bill drops. That’s what makes the QCD so endearing to us retirees who are already giving anyway.

One hard rule: the transfer must go directly from your IRA to the charity. If the money touches your bank account first, it’s no longer a QCD. Your custodian can usually handle this with a check made payable to the charity or a direct wire — just ask them specifically for a “QCD distribution.”

Roth Conversions Before RMD Age

Frustrated by the prospect of enormous RMDs later, many retirement savers convert chunks of their traditional IRA to a Roth IRA in the years between retirement and age 73 or 75. Roth IRAs have no RMDs for the original account owner. None. Zero.

Converting $50,000 per year from age 65 to 73 could meaningfully shrink the traditional IRA balance that eventually drives your RMD math. You pay taxes on each converted amount in the year of conversion — but you’re often doing it during years when income is lower, before Social Security kicks in and before RMDs start. That window matters more than people realize.

Spend From Traditional Accounts First in Early Retirement

Simple strategy — honestly almost too simple — but frequently overlooked. If you retire before your RMD age and you’re holding both traditional and Roth accounts, draw from the traditional IRA first rather than leaving it to compound untouched. Every dollar you spend from the traditional account before RMDs are required is a dollar that won’t appear in your future balance calculation. Smaller balance, smaller RMD, smaller tax hit. Not complicated. Just requires intentional sequencing from day one of retirement.

RMDs and Different Account Types

Not every retirement account plays by the same rules. Knowing which ones require RMDs — and which ones don’t — opens up planning options you might not know you have.

Accounts That Require RMDs

• Traditional IRA — Yes, RMDs required starting at 73 or 75
• 401(k), 403(b), 457(b) plans — Yes, RMDs required. Still working at the company sponsoring the plan past your applicable age? You may be able to delay RMDs from that specific plan — but not from IRAs or old 401(k)s sitting at former employers
• SEP IRA and SIMPLE IRA — Yes, same rules as a traditional IRA
• Inherited IRA (non-spouse beneficiary) — Yes, and the rules changed significantly after 2019

Accounts That Do Not Require RMDs

• Roth IRA (original owner) — No RMDs during your lifetime. One of the biggest structural advantages of the Roth
• Roth 401(k) (starting in 2024) — SECURE 2.0 eliminated RMDs from Roth 401(k)s for original owners, finally aligning them with Roth IRA treatment

Inherited IRAs — the 10-Year Rule

Inherited by someone other than a spouse after 2019, these accounts now follow the 10-year rule under the SECURE Act — the full balance must be emptied by December 31 of the tenth year following the original owner’s death. The old “stretch IRA” strategy, where beneficiaries could spread distributions over their own lifetime, is gone for most non-spouse beneficiaries.

The IRS added another wrinkle in 2024 guidance: if the original owner had already started taking RMDs before death, the beneficiary must take annual distributions during years one through nine — not simply drain the account in year ten. This distinction matters more than people expect. Your parent was 75 when they died and left you their IRA? You can’t park it for nine years and take one giant distribution at the end. Annual amounts based on your own life expectancy are required through year nine, with whatever remains due by year ten.

Surviving spouses get different — and considerably more favorable — options. A spouse can roll the inherited IRA directly into their own IRA and treat it as their own, which resets the RMD clock to their applicable age. That’s almost always the right call for a surviving spouse unless there’s a specific reason to do otherwise.

Required minimum distributions aren’t actually that hard once someone strips away the bureaucratic language and shows you the math with real numbers. While you won’t need a tax law degree to manage RMDs, you will need a handful of specific details — your December 31 balance, the right IRS table, and a calendar. First, you should verify your starting age under current law — at least if you haven’t checked since SECURE 2.0 passed. The QCD might be the best option for charitable givers, as reducing taxable income requires the transfer to bypass your bank account entirely — that is because the moment money touches your personal account, the IRS no longer treats it as a qualified charitable distribution. Know which accounts you hold, know the deadlines, and if you miss one — fix it. The correction process exists for a reason. Use it.