Required Minimum Distributions: Age, Rules, and Calculations

Here's a number that should bother you: 84% of retirees withdraw only the minimum required amount from their retirement accounts each year [1]. Not what they need. Not what makes tax sense. Just the minimum the IRS demands. They're letting a government formula dictate their entire retirement spending plan.

Required minimum distributions are the IRS's way of collecting taxes it deferred for decades. You got a tax break on every dollar you contributed to a Traditional IRA or 401(k). Now the government wants its cut. And it will penalize you 25% of any amount you don't withdraw on time.

The short version: If you have Traditional IRAs or 401(k)s, you must start taking required minimum distributions at age 73 (or 75 if born in 1960 or later). Calculate your RMD by dividing your December 31 account balance by an IRS life expectancy factor. Miss the deadline and you'll owe a 25% penalty. Strategies like Roth conversions and Qualified Charitable Distributions can reduce or eliminate the tax hit.

The Age Thresholds: 73 vs. 75

The SECURE 2.0 Act, passed in late 2022, pushed back the RMD starting age in two phases [2]:

If you were born in 1959, you might be confused. There was a drafting error in the original SECURE 2.0 legislation that listed 1959 in both the "73" and "75" categories. The IRS clarified in 2024 proposed regulations: if you were born in 1959, your RMD age is 73 [3]. Not 75. This matters for anyone turning 73 between now and the end of 2032.

One more important change: as of 2024, Roth 401(k) accounts are no longer subject to lifetime RMDs [2]. You still need to take RMDs from Traditional 401(k)s and Traditional IRAs, but your Roth employer plan is now exempt. This is a big deal for people who've been contributing to Roth 401(k)s.

How to Calculate Your RMD

The math is simple. You need two numbers:

1. Your account balance as of December 31 of the prior year
2. Your life expectancy factor from the IRS Uniform Lifetime Table (Table III in Publication 590-B) [4]

Divide the first by the second. That's your RMD.

Worked Example: Robert, Age 74

Robert is single, retired, and turned 74 in 2025. He has two retirement accounts.

Traditional IRA balance (Dec 31, 2024): $425,000 401(k) balance from former employer (Dec 31, 2024): $180,000 IRS factor for age 74: 25.5

IRA RMD: $425,000 ÷ 25.5 = $16,666.67 401(k) RMD: $180,000 ÷ 25.5 = $7,058.82 Total mandatory withdrawal: $23,725.49

Robert must take at least this much by December 31, 2025.

Here's where it gets tricky: Robert can aggregate his IRA RMDs. If he had three IRAs totaling $425,000, he could take the full $16,666.67 from just one of them. The IRS doesn't care which IRA the money comes from.

But he cannot aggregate his 401(k) with his IRAs. The $7,058.82 must come from the 401(k) itself. Each 401(k) plan requires its own separate distribution [5]. This trips up more retirees than you'd expect.

The April 1 Trap

Your first RMD gets a grace period. Instead of December 31 of the year you turn 73, you can wait until April 1 of the following year. Sounds generous. It's actually a trap.

If Robert delayed his first RMD (at age 73) to April 1 of the following year, he'd owe two RMDs in that calendar year: the delayed first-year distribution plus the current year's regular distribution. Two large withdrawals in one year can push you into the 22% or even 24% tax bracket, up from 12% if you'd spread them out.

Almost every financial planner will tell you: take your first RMD by December 31 of the year you turn 73. Don't use the April 1 extension unless you have a specific tax reason.

What Happens If You Miss

The penalty used to be 50% of the amount you failed to withdraw. SECURE 2.0 dropped it to 25% [2]. And if you correct the mistake within the IRS's correction window (generally two years), the penalty drops further to 10%.

Using Robert's numbers: if he forgot the 401(k) RMD of $7,058.82:

• 25% penalty: $1,764.71
• 10% penalty (if corrected quickly): $705.88

You correct it by filing Form 5329 with your tax return and taking the missed distribution as soon as you discover the error. The IRS is surprisingly forgiving here, as long as you act quickly.

Three Strategies to Reduce the RMD Tax Hit

1. Roth Conversions Before RMDs Start

Every dollar you convert from a Traditional IRA to a Roth IRA is a dollar that will never be subject to RMDs. You pay income tax on the conversion now, but the money grows tax-free forever after.

The ideal window is between retirement and age 73, especially years when you have little other income. A retiree with $500,000 in a Traditional IRA who converts $50,000 per year for eight years will have a dramatically smaller RMD when 73 arrives. For a deeper look at this approach, see our guide to tax-efficient withdrawal strategies.

2. Qualified Charitable Distributions (QCDs)

If you're 70½ or older and give to charity, this is the single best tax move available.

A QCD lets you transfer up to $108,000 (2025 limit) directly from your IRA to a qualified charity [6]. The distribution counts toward your RMD but isn't included in your taxable income. You don't even report it as income on your tax return.

Compare that to taking the RMD as income, paying tax on it, and then donating cash to charity and claiming a deduction. The QCD is almost always better because:

• It reduces your AGI (the deduction approach doesn't reduce AGI, just taxable income)
• Lower AGI means lower Medicare premiums
• Lower AGI means less Social Security is taxable
• You don't need to itemize deductions to benefit

3. Donate to a Charitable Gift Annuity

New under SECURE 2.0: a one-time QCD of up to $54,000 to a split-interest entity like a Charitable Gift Annuity [7]. You get an income stream for life, satisfy part of your RMD, and the amount is excluded from taxable income. This is a niche strategy, but for charitably inclined retirees with large IRAs, it's worth investigating.

The Accounts RMDs Apply To

Not every retirement account requires distributions. Here's the breakdown:

For inherited IRAs, the rules have been a mess. The IRS waived penalties for missed annual distributions under the 10-year rule for 2021 through 2024. Starting in 2025, annual distributions for non-spouse beneficiaries of account owners who died after their required beginning date are expected to be enforced [8].

The Behavioral Problem

The fact that 84% of retirees take only the minimum reveals something about human psychology. People anchor to the RMD number as if it's a spending recommendation. It's not. It's a tax compliance requirement.

The RMD formula is based on IRS life expectancy tables, not your actual spending needs. At 73, the factor is 26.5, which means you withdraw about 3.8% of your balance. At 80, the factor is 20.2, or about 5%. At 90, it's 12.2, or about 8.2%.

If you need more than your RMD to live, take more. If you need less, you still have to take the RMD, but you can reinvest the after-tax amount in a taxable brokerage account at Schwab or Fidelity. Don't let a government table dictate your quality of life.

And don't forget: the average 401(k) balance for people 65 and older is $272,588 [9]. For many retirees, the RMD is a relatively small amount. For others with large IRAs built over decades, it can push them into brackets they never anticipated. Know which group you're in.

Your Next Move

1. Look up your factor. Go to IRS Publication 590-B, Table III (Uniform Lifetime Table). Find your age. That's your divisor for next year.

2. Estimate your RMD now. Divide your year-end IRA/401(k) balance by that factor. If the number is larger than you expected, start planning Roth conversions to shrink the balance before RMDs begin.

3. Set a calendar reminder for November. Don't wait until December 31. Take your RMD by mid-November to avoid any processing delays. Use our compound interest calculator to see how pre-RMD Roth conversions affect your long-term balance.

4. Ask about QCDs. If you donate $5,000 or more to charity annually, call your IRA custodian and set up a Qualified Charitable Distribution. It takes five minutes and could save you a thousand dollars or more in taxes.

5. If you were born in 1959, your age is 73. Don't rely on outdated articles that say otherwise. The IRS has clarified this [3]. Plan accordingly.

References

1. J.P. Morgan Asset Management / EBRI. (2024). RMD Withdrawal Behavior Data. 401k Specialist Magazine.
2. Congressional Research Service. (2024). Required Minimum Distributions (RMDs): Key Rules and Issues. Congress.gov.
3. Ascensus. (2024). More Changes for RMDs: Final Regulations and 1959 Clarification. Ascensus.com.
4. Internal Revenue Service. (2025). Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs). IRS.gov.
5. Internal Revenue Service. (2025). Retirement Topics: Required Minimum Distributions (RMDs). IRS.gov.
6. Campbell & Co. / Northern Trust. (2025). QCD Limits for 2025. mycampbellandco.com.
7. Forvis Mazars. (2024). QCD to Split-Interest Entities Under SECURE 2.0. ForvisMazars.us.
8. Internal Revenue Service. (2024). Notice 2024-35: Inherited IRA RMD Waiver Extension.
9. Vanguard. (2025). How America Saves 2025. Vanguard.com.