What is a required minimum distribution?

An RMD is the minimum amount you must withdraw each year from most pre-tax retirement accounts (traditional IRAs, 401(k)s, and similar) once you reach the starting age. The amount is based on your account balance and an IRS life-expectancy factor, and it's taxed as ordinary income.

How is my RMD amount calculated?

Divide your prior year-end account balance by the IRS Uniform Lifetime Table factor for your age. At age 73 the factor is 26.5, so a $1,000,000 traditional IRA produces a first required minimum distribution of about $37,700, taxed as ordinary income. The factor decreases each year, so the required amount generally rises as you age.

At what age do RMDs start?

Under current rules RMDs begin at age 73, and the starting age is scheduled to rise to 75 in 2033. Roth IRAs have no lifetime RMDs for the original owner. Always confirm the current age, since the rules have changed several times.

How can I reduce my RMDs?

Common strategies include doing Roth conversions in lower-income years before RMDs start (shrinking the pre-tax balance), qualified charitable distributions to satisfy the RMD without taxable income, and coordinating withdrawals across account types. Some people use the after-tax dollars from RMDs they don't need to fund other goals, including life insurance for heirs.

Required minimum distributions (RMDs), explained

For decades the government let your pre-tax retirement money grow untaxed. RMDs are when it collects. Knowing the rules — and planning before they start — is the difference between a manageable tax bill and an avoidable one.

By Aliya Zhetibay · Reviewed for general accuracy by Evelina Nedossekina, Licensed Life & Health Insurance Agent (FL) · Updated July 3, 2026

What an RMD is

A required minimum distribution is the minimum you must withdraw each year from most pre-tax retirement accounts — traditional 401(k)s, traditional IRAs, and similar — once you hit the starting age. The amount is your prior year-end balance divided by an IRS life-expectancy factor, and every dollar is taxed as ordinary income. Roth IRAs have no lifetime RMDs for the original owner — one of their quiet advantages.

When they start (and the penalty)

Under current rules, RMDs begin at age 73, scheduled to rise to 75 in 2033. Miss one, and the penalty is steep — historically up to 25% of the shortfall (reduced if corrected promptly). The rules have changed repeatedly, so confirm the current age before you rely on it.

How your RMD is calculated — with a number

Take your prior year-end balance and divide by the IRS life-expectancy factor for your age (the Uniform Lifetime Table). At age 73 the factor is 26.5. So a $1,000,000 traditional IRA produces a first RMD of about $1,000,000 ÷ 26.5 ≈ $37,700, all taxable as ordinary income. The factor shrinks each year as you age, so the required percentage — and usually the dollar amount — climbs over time. That rising curve is why a big pre-tax balance can push your taxable income higher every year of retirement.

Two timing traps. Your first RMD can be delayed to April 1 of the year after you turn 73 — but then you take two RMDs in that year, stacking the income; taking the first on time usually avoids the pile-up. And if you're still working past 73 and don't own 5%+ of the company, you can often delay RMDs from that employer's 401(k) (but not from IRAs) until you retire.

Why RMDs can hurt

If you’ve saved well, a large pre-tax balance can force withdrawals you don’t need — and that extra income can push you into a higher bracket, make more of your Social Security taxable, and raise Medicare premiums (IRMAA). It’s a tax squeeze that arrives right when you’d hoped to coast. This is the case for building tax-free buckets earlier — see tax-free retirement income.

How to soften the hit

Roth conversions before 73. Converting in lower-income years shrinks the future RMD base. See Roth conversions explained.
Qualified charitable distributions (QCDs). If charitably inclined, sending RMD money directly to charity satisfies the RMD without adding taxable income.
Coordinate withdrawals across taxable, tax-deferred, and tax-free accounts to manage your bracket year to year.

If you don’t need the money

Many retirees are forced to take RMDs they don’t actually need to spend. One option is to redeploy those after-tax dollars toward a goal that is tax-efficient — for example, funding a life insurance policy that passes an income-tax-free benefit to heirs, effectively converting a taxable, forced withdrawal into a tax-free legacy. Whether that makes sense depends on your health, goals, and estate plan, so it’s worth modeling with an advisor rather than assuming.

Frequently asked questions

What is an RMD?: The minimum you must withdraw yearly from most pre-tax retirement accounts once you reach the starting age, based on your balance and an IRS factor, taxed as ordinary income.
At what age do RMDs start?: Age 73 under current rules, rising to 75 in 2033. Roth IRAs have no lifetime RMDs for the original owner. Confirm the current age, as it has changed.
How can I reduce RMDs?: Roth conversions before they start, qualified charitable distributions, and coordinating withdrawals. RMDs you don't need can also fund goals like a life insurance legacy.
How is my RMD amount calculated?: Divide your prior year-end balance by the IRS Uniform Lifetime Table factor for your age. At 73 the factor is 26.5, so a $1,000,000 IRA gives a first RMD of about $37,700. The factor shrinks each year, so the required amount generally rises with age.

Keep exploring: Roth conversions explained · How retirement income is taxed · Inherited IRA rules · Is life insurance taxable?

Educational only; not financial or tax advice. RMD ages, factors, and penalties depend on current law and your situation — confirm specifics with a qualified professional.