If you were born in 1953, the IRS has an appointment with your retirement account this year. Turning 73 in 2026 starts the clock on required minimum distributions, the annual withdrawals the government insists on after decades of letting your traditional IRA and 401(k) grow untaxed. The deal was always deferral, not forgiveness, and at 73 the bill starts coming due.
The rules were reshuffled by the SECURE 2.0 law, and plenty of what people remember about RMDs is now out of date: the starting age moved, the penalty shrank, and Roth workplace accounts came off the list. Here is the current state of play, from the official IRS guidance.
Who must take an RMD, and by when
Under current law, withdrawals generally must begin at age 73. That applies to people born from 1951 through 1959; anyone born in 1960 or later gets to wait until 75 under the same law. The requirement covers traditional IRAs, SEP and SIMPLE IRAs, and workplace plans such as 401(k), 403(b), and 457(b) accounts.
Timing matters more than most people realize. Your first RMD, for the year you turn 73, can be delayed until April 1 of the following year. Every RMD after that is due by December 31. The catch: if you use the April grace period, you take two taxable distributions in one calendar year, your first and your second, which can shove you into a higher bracket and raise your Medicare premiums two years later. Many retirees are better off taking the first one in the year they turn 73 and keeping each year’s income even.
Two carve-outs are worth knowing. If you are still working at 73, your current employer’s plan may let you delay RMDs from that plan until you retire, as long as you do not own more than 5 percent of the company (IRAs get no such break). And Roth accounts are the clean exception: Roth IRAs have no lifetime RMDs at all, and since 2024, designated Roth accounts in 401(k) and 403(b) plans do not require lifetime distributions either.
How the amount is calculated
The formula is simpler than its reputation. Take your account balance as of December 31 of the prior year and divide it by a life-expectancy factor from the IRS tables in Publication 590-B. Most people use Table III, the Uniform Lifetime Table, where the factor at age 73 is 26.5.
So a 73-year-old whose IRA held $400,000 at the end of last year must withdraw $400,000 divided by 26.5, which is about $15,094 this year. The factor shrinks as you age, so the required percentage creeps up over time: roughly 3.8 percent of the balance at 73, and a larger slice each year after. A different table with bigger factors, and therefore smaller RMDs, applies if your sole beneficiary is a spouse more than ten years younger.
If you have several IRAs, you calculate the RMD for each but may take the total from any one of them. Workplace plans are stricter: each 401(k) generally has to pay out its own RMD separately. Your custodian will usually calculate the number for you, but the legal responsibility for getting it right is yours.
How the money is taxed
RMDs from traditional accounts are ordinary income, taxed at the same federal rates as wages, and they stack on top of Social Security and pension income. There is no capital-gains treatment, no matter what the account holds. A large RMD can also make more of your Social Security benefit taxable and can trigger Medicare’s income-related premium surcharges down the line, which is why retirees with big balances often plan withdrawals, and sometimes Roth conversions, years before 73 arrives.
You can have taxes withheld from the distribution itself, which many retirees use as a painless way to cover their whole year’s tax bill in December. What you cannot do is roll an RMD into another retirement account; the required amount has to actually leave tax-deferred status.
The penalty shrank, but it still stings
Miss the deadline, or withdraw too little, and the IRS imposes an excise tax on the shortfall. It used to be a brutal 50 percent. SECURE 2.0 cut it: the penalty is now 25 percent of the amount not taken, and it drops to 10 percent if you correct the mistake within roughly two years, before the IRS comes calling. The penalty is reported on Form 5329, and the IRS can waive it entirely if the shortfall came from reasonable error and you have taken steps to fix it; you attach an explanation and ask.
The practical advice: if you discover a missed RMD, withdraw the shortfall immediately, then deal with the paperwork. Speed is literally worth money here.
Ways to soften the hit
The most popular pressure valve is the qualified charitable distribution. IRA owners 70½ or older can send money directly from the IRA to a qualified charity; the transfer counts toward the year’s RMD and never shows up in adjusted gross income. The annual cap is indexed for inflation and now sits above $100,000 per person; check the current-year limit in IRS Publication 590-B or with your custodian before writing the instruction letter, since the figure moves each year.
Beyond that, the levers are timing and location: taking the first RMD early to avoid doubling up, spreading withdrawals across the year, holding tax-inefficient assets inside the accounts you must drain anyway, and converting some traditional money to Roth in low-income years before RMDs begin. None of it makes the tax disappear. All of it can decide which bracket the money lands in, and after 73, that is the game.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
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