RMD Rules Just Changed Again — What You Need to Know

Current RMD ages

• Born 1950 or earlier: RMDs already started (was 70½, then 72).
• Born 1951–1959: RMDs start at 73.
• Born 1960 or later: RMDs start at 75.

These are mandatory withdrawals from traditional IRAs, 401(k)s, 403(b)s, and similar pre-tax retirement accounts. Roth IRAs have no RMDs during the owner's lifetime (Roth 401(k)s also lost their RMD requirement starting in 2024).

How RMDs are calculated

Your RMD = prior year-end account balance ÷ IRS life-expectancy divisor. At age 73, the divisor is about 26.5, so the RMD is roughly 3.8% of the balance. At age 80 it's about 5%. At age 90, about 8.8%. The percentage grows each year.

On a $1,000,000 IRA, the first RMD at age 73 is ~$37,700.

The penalty for missing one

Used to be a brutal 50% excise tax on the missed amount. SECURE 2.0 cut it to 25% — and to just 10% if you correct it within two years and file Form 5329. Still painful, still avoidable: most custodians (Fidelity, Schwab, Vanguard) will calculate and automate your RMD if you ask.

First-year deferral trap

Your first RMD can be delayed until April 1 of the year after you turn 73. But every subsequent RMD must be taken by Dec 31. So if you defer the first one, you'll take two RMDs in one year — often pushing you into a higher tax bracket and an IRMAA Medicare surcharge. Most planners take the first RMD on time, not deferred.

Qualified Charitable Distributions (QCDs)

The single best RMD hack. If you're 70½ or older, you can send up to $108,000/year (2026 figure) directly from your IRA to a qualified charity. The amount counts toward your RMD but doesn't appear on your AGI. That means:

• No income tax on the withdrawal.
• No bump into a higher Medicare IRMAA bracket.
• No reduction of QBI or other AGI-tied benefits.
• You don't need to itemize to get the tax break.

If you're charitable anyway, QCD is almost always better than donating from your checking account.

RMD aggregation rules

• Multiple IRAs: calculate RMD for each separately, then withdraw the total from any one or any combination.
• Multiple 401(k)s: calculate AND withdraw from each separately.
• 403(b)s: similar aggregation to IRAs.

This matters because consolidating multiple old 401(k)s into one IRA simplifies RMD management — one of several reasons to roll old workplace plans into an IRA after you separate from the employer.

Inherited IRAs are different

The 10-year rule under SECURE Act (passed 2019) means most non-spouse beneficiaries must drain an inherited IRA within 10 years of the original owner's death. Spouses can still treat it as their own. For everyone else, plan the drawdown across the 10-year window to minimize the tax hit.

Strategies to reduce future RMDs

• Roth conversions in your 60s (see our Roth conversion playbook).
• QCDs starting at 70½, before RMDs even kick in.
• Drawing IRA money in low-income years (between retirement and Social Security/RMDs).
• Delaying Social Security so your IRA can fund the gap years — RMDs later are smaller because the IRA is smaller.

Bottom line

The new 73/75 start ages give you more conversion runway. Use it. A retiree who fills the 12% bracket with Roth conversions each year between ages 65 and 73 can cut lifetime RMD-driven taxes by $50k–$200k.