2026 RMD Reference Guide

If you're turning age 73 this year, it's time to start taking the annual required minimum distributions (RMDs) from tax-deferred retirement accounts including 401(k)s and traditional IRAs. The penalty for not taking your RMD can be pretty steep: The IRS will levy a penalty amounting to 25% of the sum you should have withdrawn. That said, if you correct the issue by taking your full withdrawal and filing IRS Form 5329 (along with a letter of explanation why the RMD was missed), the IRS may lower the penalty to 10%.

Here's what to know.

In general, you must take your first RMD by April 1 of the year after you reach RMD age (though, there are some exceptions, as we'll see below). For every year after that, you'll have to take your RMDs by December 31.

The table below covers what you should know about start dates for different kinds of accounts.

Another wrinkle is that you generally must determine your RMD for each account separately. That said, in some situations you may be able to combine your RMD obligations from each account and take the full amount from a single account. The processes of combining RMDs is called aggregation.

You can calculate your RMD using:

• Your account balance as of December 31 of the prior year (do this for each account)
• Divide that number by the "Distribution Period" associated with your birth year from IRS Publication 590-B.

As noted above, money you withdraw from a tax-deferred retirement account is generally taxable. And if you have a significant amount of tax-deferred savings when you hit RMD age, you could be in for a bit of a tax shock when required distributions start.

You do have some options, though:

• Qualified distributions before RMD age. In some cases, waiting as long as possible to tap your tax-deferred assets can make sense, as you'll leave more time for potential growth. That said, if you already have a large amount of tax-deferred savings, starting withdrawals before you reach RMD age could be a tax-smart approach. Why? By lowering your balance before you reach RMD age, your RMDs may not be as large when it's finally time to start them. Large RMDs later in life could potentially push you into a higher tax bracket.
• Roth conversion. The idea here is to convert some of your tax-deferred savings into Roth savings. You'll have to pay taxes in the year of the conversion, but by lowering your tax-deferred account balance, you could potentially have smaller RMDs and gain a tax-free resource for future use (or to leave a legacy). Roth conversions generally make the most sense for people who expect to be in a higher tax bracket when they start taking withdrawals than they are at the time they convert the assets. In other words, it's better to pay a lower tax rate on a conversion today than a higher rate on a withdrawal in the future. It's also worth noting that tax rates are at historically low levels compared to rates over the past few decades, so conversions can also make sense if you think rates will be higher in the future.
• Qualified charitable distributions. A QCD can allow you to make tax-free donations directly from an IRA to a qualified charity, thereby potentially satisfying all or part of your annual IRA RMD. For 2026, an individual aged 70 ½ or older can donate up to $111,000 a year to a qualified charity, indexed for inflation.
• Net Unrealized Appreciation. This is a tax strategy for people who own company stock in a qualified employer-sponsored retirement plan and are at least 59½ or separated from their employer. Taking advantage of this strategy may save you money and reduce your potential RMDs.