How Required Minimum Distributions Actually Work And When They Start

Required Minimum Distributions (RMDs) generally must begin by April 1 of the year after you turn 73 (or 75 if born in 1960 or later), and the annual amount is calculated by dividing each account's prior year-end balance by your IRS life expectancy factor from the Uniform Lifetime Table.

The exact age your required minimum distributions begin

The SECURE 2.0 Act of 2022 created three different starting ages depending on your birth year. If you were born before July 1, 1949, your RMDs begin at age 70½, that’s the old rule, and it still applies to that group. If you were born between July 1, 1949, and the final day of 1959, your RMDs start at age 73. If you were born in 1960 or later, your RMDs start at age 75. The confusion about 72, 73, and 75 stems from SECURE 1.0 and SECURE 2.0. SECURE 1.0 raised 70½ to 72 in 2019. SECURE 2.0 then raised 72 to 73 in 2022 and scheduled a further jump to 75 for the 1960+ cohort. For a concrete example: if your 73rd birthday falls on the first day of the holiday season in 2025, your first RMD is due by April 1, 2026, not the last day of 2025. That April 1 deadline applies *only* to your first distribution. Every subsequent year’s RMD must be taken by the final calendar day of that year. So if you delay your first RMD to the April 1 deadline, you’ll owe two distributions in that same year, one for the prior year and one for the current year. This can spike your taxable income and potentially trigger higher Medicare premiums. It’s a classic trap that a financial advisor would flag when discussing retirement withdrawal strategies.

The simple math behind the withdrawal amount

The formula is: RMD = account balance (as of the prior year’s final day) ÷ life expectancy factor (from IRS Publication 590-B, Table III, the Uniform Lifetime Table). For example, if your IRA balance was $500,000 on the final day of 2024 and you turn 73 in 2025, your factor is 26.5. Divide the balance by 26.5, and your 2025 RMD is a specific dollar figure you can verify using the official IRS worksheets at IRS.gov. That factor shrinks every year. At age 80 it drops to 18.7. At 85 it’s 14.8. At 90 it’s 11.4. This means the percentage you must withdraw rises steadily with age: 3.77% at 73, 5.35% at 80, 6.76% at 85, and 8.77% at 90. The Uniform Lifetime Table assumes you’re drawing down over a joint life expectancy with a beneficiary 10 years younger. That’s why it yields a smaller factor, and thus a smaller RMD, than the single-life table. You’ll find the full table in Publication 590-B. You must use the factor for the age you turn *that calendar year*, not your age on January 1. One important note: if your spouse is the sole beneficiary and is more than 10 years younger, you can use the Joint and Last Survivor Table (Table II) instead. That gives an even lower factor, but it’s the exception, not the rule.

The costly mistake people make with multiple accounts

Here’s where most retirees trip: you must calculate the RMD separately for each 401(k), 403(b), and 457(b) you own. You cannot add them together. However, once you’ve calculated each plan’s RMD, you *can* withdraw the total from a single account, provided you’ve aggregated them correctly. IRAs are different. You can aggregate all traditional IRAs, including SEP and SIMPLE IRAs, but not inherited IRAs, and take the combined RMD from any one of them. The penalty for missing an RMD or withdrawing too little starts as a percentage set by Congress, which the IRS can reduce if you correct the error quickly and file Form 5329 with a reasonable cause explanation. For example, if your RMD is $20,000 and you withdraw only $15,000, the shortfall is $5,000. The initial penalty is a four-figure sum, but if you fix it promptly, it drops to a much smaller amount, check the current penalty rates on the IRS website before you file. A common mistake: forgetting that a Roth 401(k) is *not* exempt until you roll it into a Roth IRA, more on that below. Another: failing to take an RMD from a self-directed IRA that holds real estate or private equity, where there’s no cash to distribute. You still owe the RMD, and you may have to sell an asset or take an in-kind distribution to satisfy it. When you’re juggling multiple accounts, it’s worth asking yourself which accounts should i withdraw from first to minimize taxes, but that’s a separate decision from the RMD itself. The RMD is mandatory regardless of your withdrawal order.

When the answer is no: accounts and situations exempt from RMDs

Roth IRAs are the big winner: they have *no* lifetime RMDs, period. That’s true for the original owner and for a spouse who inherits the account as their own. However, Roth 401(k) dollars were a different story until 2024. The SECURE 2.0 Act eliminated RMDs on Roth 401(k), 403(b), and 457(b) balances for tax years beginning after the final day of 2023. So if you turned 73 in 2024 and held a Roth 401(k), you were suddenly exempt, permanently, thanks to the law’s language. But that exemption applies only to *Roth* dollars inside those plans. Pre-tax contributions in the same plan still require RMDs. The “still-working” exception is another carve-out. If you’re still employed and own 5% or less of the company sponsoring your 401(k), you can delay RMDs from *that specific plan* until April 1 of the year after you retire, even if you’re past 73. This exception does *not* apply to IRAs. It also doesn’t apply to 401(k)s you own from a previous employer, those must follow the normal age rules. Finally, inherited IRAs have their own separate RMD schedule, usually based on the 10-year rule for beneficiaries after the SECURE Act. That schedule is distinct from your own retirement accounts. A common myth is that a zero-balance account avoids RMDs. That’s true, but only if the balance is truly zero on the year’s final day. Any dollar amount, even a single dollar, still requires the calculation.

Frequently asked questions

What happens if I delay my first RMD past the April 1 deadline?

You’ll owe a penalty on the amount you should have withdrawn, and the IRS also charges interest on the underpayment from the due date. The exact penalty percentage is set by law and can be reduced if you self-correct promptly, confirm the current rate directly with the IRS. The total bill grows the longer you wait.

Can I take my RMD in monthly installments instead of one lump sum?

Yes, as long as the total by the year’s final day meets the calculated amount. Many retirees set up automatic monthly transfers from their IRA to smooth cash flow. But if you under-withdraw by year-end, you’ll face the same penalty as if you took nothing.

Does my RMD count toward my taxable income for Social Security benefits?

Yes, RMDs are ordinary income. This means they can push provisional income thresholds and cause up to 85% of your Social Security benefits to become taxable. If you’re trying to manage a safe withdrawal rate and how has the 4% rule held up, remember that RMDs are forced income, not optional spending. You may need to adjust your other withdrawals accordingly.

What if my IRA loses value after I calculate the RMD in January?

Your RMD is fixed based on the prior year’s final-day balance. A market drop after that date doesn’t lower your required amount. However, if you take your RMD late in the year instead of January, you’ll have more time for the market to recover before the next year’s calculation. That’s one reason many advisors recommend waiting until late in the year.

Can I roll over my RMD into a Roth IRA to avoid taking it?

No, RMDs cannot be rolled over, even into a Roth account. The distribution must come out of your traditional IRA first. Only the amount *above* the RMD can be converted to a Roth. If you try to convert your entire RMD, the RMD portion is treated as a regular distribution, and the excess conversion is still taxable but doesn’t satisfy your RMD obligation. For a deeper dive into coordinating these rules with other income sources, see the broader topic of retirement withdrawal strategies in Retirement Withdrawal Strategies: What to Know and How to Handle It, which is the only page that shows you how to create a retirement paycheck from multiple accounts while navigating the exact RMD rules that trip up most retirees.