Required minimum distributions are mandatory withdrawals from tax-deferred retirement accounts, starting at age 73 for most current retirees. Your RMD equals your prior year-end balance divided by an IRS life expectancy factor. Because the withdrawal is taxable, RMD timing affects your federal bracket, your Medicare premiums, and how much of your Social Security gets taxed.

Key Takeaways

• Most retirees start RMDs at 73, and those born in 1960 or later start at 75.
• Missing an RMD triggers a 25% excise tax, reduced to 10% if corrected within two years.
• IRA RMDs can be combined and taken from one IRA, but most workplace plan RMDs can’t.
• Your first RMD has an April 1 deadline, and using it can push two distributions into one tax year.

Hypothetical couple, Mike and Molly, are both 73 this year, and neither of them needs the money. They have a pension, Social Security, and a paid-off house in south Charlotte. Mike’s IRA still produced a required withdrawal of about $30,000 they didn’t ask for and can’t refuse.

RMD Rules Retirees Need to Know

An RMD is a mandatory withdrawal from certain tax-deferred accounts once you reach a specific age. The IRS let that money grow untaxed for decades, and this is when the bill comes due.

They apply whether or not you need the money. You can be fully retired with every expense covered, want the account left invested, and still have to withdraw.

Read “minimum” literally. An RMD is a floor, not a recommendation. Before your first deadline, pin down your starting age, your account types, and the due date.

Accounts Subject to RMDs

Traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, and governmental 457(b) plans are all subject to RMDs.

Roth IRAs are the exception, with no lifetime distributions required for the original owner. Designated Roth accounts inside a 401(k) or 403(b) stopped requiring lifetime RMDs in 2024 under SECURE 2.0.

Inherited Roth accounts are different. A beneficiary generally must still take distributions.

When RMDs Begin

Your starting age depends on your birth year. Born from 1951 through 1959, your RMD age is 73. Born in 1960 or later, it’s 75.

Your first RMD is due by April 1 of the year after you reach that age. Every RMD after that is due by December 31.

That grace period is a trap as often as a gift. Turn 73 in 2026, wait until March 2027, and your second RMD is still due that December. Two taxable distributions land in one calendar year.

How RMD Amounts and Aggregation Rules Work

Your RMD is your December 31 balance from the prior year divided by an IRS life expectancy factor. Mike’s $800,000 IRA balance divided by the age-73 factor of 26.5 produces an RMD of about $30,189.

Your custodian usually sends an estimate. That’s a convenience, not a guarantee, and you are responsible for taking the correct amount.

The math gets harder as the account list grows. Multiple IRAs, an old 401(k), an inherited account, or a much younger spouse each change it.

Annual Calculation

Each account’s RMD is calculated separately first. Only then do the aggregation rules tell you where you can withdraw from.

Most retirees use the Uniform Lifetime Table. A different table applies when your spouse is sole beneficiary and more than 10 years younger, and it produces a smaller withdrawal. Inherited accounts follow separate rules.

Multiple Accounts

IRA RMDs are calculated per account but can be combined. With four traditional IRAs, add up the four amounts and take the total from whichever one makes sense. SEP and SIMPLE IRAs aggregate the same way.

Workplace plans generally don’t. A 401(k) RMD must come from that 401(k), and each 457(b) works the same way. Multiple 403(b) contracts aggregate with each other, but never with an IRA.

So one large withdrawal doesn’t cover everything. Pull the full amount from your IRA, and both 401(k) RMDs are still unsatisfied.

Tax Issues Created by RMDs

RMDs from pre-tax accounts are taxed as ordinary income federally, at the same rates as a paycheck. North Carolina taxes them at its flat rate.

The problem isn’t the RMD alone. It’s the stacking: Social Security, pensions, interest, dividends, capital gains, and part-time work all sit underneath it.

For Mike and Molly, taxable income was about $85,000 before the RMD. Adding $30,189 brings them to roughly $115,189, crossing the top of the 12% bracket for joint filers at $100,800. About $14,400 gets taxed at 22% instead of 12%.

Medicare and Social Security

Larger RMDs can raise your Medicare premiums. IRMAA surcharges start once modified adjusted gross income exceeds $109,000 single or $218,000 joint in 2026, based on your tax return from two years ago.

They can also increase how much of your Social Security benefit is taxable, up to 85%, because that calculation counts your other income.

Review both before year-end. IRMAA is a cliff: one dollar over a threshold triggers the full surcharge. Our tax planning work usually starts here.

Withholding and Estimated Payments

You can have federal tax withheld directly from an RMD or make quarterly estimated payments. Withholding from a December distribution is often simpler, since withheld tax counts as paid evenly across the year.

Revisit it whenever the RMD grows, Social Security starts, investment income shifts, or a spouse dies. The goal is avoiding an April surprise without overwithholding.

Planning Before and After RMDs Begin

Some RMD planning happens years before the first distribution. The rest happens annually once they’re required. This isn’t full withdrawal sequencing. It’s about what mandatory distributions do to your taxes, your giving, your cash flow, and what your heirs inherit.

Start with one question: what is this money going to do? Spent, donated, reinvested, held in cash, or used to cover the tax bill. Answering in advance turns a forced withdrawal into a decision.

Before RMDs Begin

Estimate your future RMDs now, using current balances, a growth assumption, your starting age, and the income you expect. Most people are surprised by the number.

Roth conversions in the gap years are the main lever. Converting pre-tax dollars shrinks the balance that drives future RMDs, though it creates taxable income now. Our retirement income planning process weighs that year by year.

Size any conversion against your bracket, the IRMAA thresholds, the cash outside the IRA to pay the tax, and future spending. Filling the 22% bracket can be smart. Spilling into 32% usually isn’t.

Once RMDs Are Required

Coordinate timing with your cash needs, your withholding, and investment sales you planned anyway. December keeps more money invested. January removes the risk of forgetting.

Qualified charitable distributions are the strongest tool after 70½. A QCD goes straight from your IRA to a qualified charity, satisfies part or all of your IRA RMD, and stays out of your adjusted gross income. The 2026 limit is $111,000 per person.

If you don’t need the money, decide where the after-tax proceeds go before they land in checking. Reinvesting, funding gifts, or building cash reserves all work. Drift doesn’t.

Mistakes, Inherited Accounts, and Spouse-Related Issues

RMD mistakes get expensive when deadlines slip, ownership is unclear, or beneficiary rules are misunderstood. These aren’t obscure errors. They’re the ordinary ones.

Inherited accounts and surviving-spouse situations deserve fast attention, because the best choices have short windows. Check beneficiary designations too, since a stale one can undo a careful estate plan.

Missed or Insufficient RMDs

Missing an RMD, or taking too little, triggers an excise tax on the shortfall. The penalty is 25% of what you failed to withdraw.

It drops to 10% if you correct it within the two-year correction window and file the right form. Fix it as soon as you find it and document what happened.

Inherited Accounts

Inherited IRAs and workplace plans follow rules that depend on who you are and when the original owner died. You may face a 10-year payout period, annual distributions inside those 10 years, or a life expectancy calculation.

Inherited Roth accounts still require distributions even though original owners never faced lifetime Roth RMDs. Tax-free withdrawals are easy to forget.

After a Spouse Passes Away

A surviving spouse has options no other beneficiary has, including treating an inherited IRA as their own and using their own age going forward. That one choice can change the required amount significantly.

The death of a spouse changes everything around it. Filing status shifts to single, the brackets narrow, and the IRMAA thresholds drop, so a survivor can face a higher tax bill on less income. Review titling, beneficiary designations, survivor income needs, and estate goals after the first death.

RMD Timing and Taxes FAQs

1. When do required minimum distributions begin?

RMDs begin at age 73 if you were born from 1951 through 1959, and at 75 if you were born in 1960 or later. Your first is due by April 1 of the year after you reach that age. Every one after that is due by December 31.

2. Which retirement accounts are subject to RMDs?

Traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, and governmental 457(b) plans are subject to RMDs. Roth IRAs require no lifetime distributions for the original owner, and designated Roth accounts in workplace plans stopped requiring them in 2024.

3. How are RMD amounts calculated?

Your RMD equals your December 31 balance from the prior year divided by an IRS life expectancy factor for your age. Most retirees use the Uniform Lifetime Table, where the factor at 73 is 26.5. A $500,000 balance at 73 produces an RMD of about $18,868.

4. Can I take RMDs from one account if I have several IRAs?

Yes, for IRAs. Calculate the amount for each traditional, SEP, and SIMPLE IRA, then take the combined total from whichever IRA you choose. Workplace plans differ: a 401(k) or 457(b) RMD must come from that specific plan.

5. How are RMDs taxed?

RMDs from pre-tax accounts are taxed as ordinary income federally, and North Carolina taxes them at the state’s flat rate. Because RMD income stacks on top of Social Security, pensions, and investment income, it can push you into a higher bracket and raise your Medicare premiums two years later.

6. Can qualified charitable distributions satisfy an RMD?

Yes. If you’re at least 70½, a qualified charitable distribution sends money directly from your IRA to a qualified charity and counts toward your IRA RMD. The 2026 limit is $111,000 per person, and it stays out of your adjusted gross income, which a charitable deduction doesn’t do.

Get Help Building a Smarter RMD Strategy

RMDs touch more of your financial life than the withdrawal suggests. They affect your federal bracket, your Medicare premiums, your Social Security taxation, your giving, your inherited accounts, and what your heirs receive.

Good planning gets ahead of it: estimating future RMDs while you can still act, evaluating Roth conversions before distributions start, coordinating each year’s withdrawal, and catching the mistakes that cost real money. Required distributions should be a planned part of your retirement, not a task you rush through every December.

If you’d like a second set of eyes on your RMD strategy, schedule a complimentary consultation.