Required Minimum Distributions in 2026: How RMDs Work, the New Age 73 Rule, and How to Avoid the 25% Penalty

The day you turn 73, the IRS starts counting. Required Minimum Distributions — RMDs — are the annual withdrawals that traditional retirement accounts must pay out once their owner reaches that age. The Internal Revenue Service is unambiguous on the principle: the tax break you got while saving was a deferral, not a forgiveness. Eventually the government wants its cut.

For tax year 2026, the rules have changed in three meaningful ways since 2022, and most retirees we hear from still operate on the old playbook. The age was pushed from 70½ to 72 to 73 under Secure Act 2.0 (Public Law 117-328, December 2022), and it will jump again to 75 starting January 1, 2033. The penalty for missing an RMD was sliced in half — from a brutal 50% excise tax down to 25%, and just 10% if you fix the miss within two years. And starting in 2024, Roth 401(k) and Roth 403(b) accounts no longer have lifetime RMDs at all, finally putting them on the same footing as Roth IRAs.

That last change matters more than it sounds. Until two tax years ago, a worker who diligently funneled paycheck-after-paycheck into an employer Roth 401(k) was still forced to start emptying it at retirement age — defeating the whole point of the Roth wrapper. That trap is now closed.

Who has to take an RMD in 2026?

Two questions decide it: how old are you, and what kind of account is the money sitting in?

On age, the IRS uses your birthday in the calendar year. Under current law, anyone born between 1951 and 1959 hits their required beginning date the year they turn 73. So if you were born in 1953, you turned 73 in 2026 — your first RMD is for tax year 2026. People born in 1960 or later get an extra two-year reprieve: their RMD age becomes 75, effective with the first cohort that reaches it in 2033.

On the account, the IRS draws a hard line between pre-tax and Roth dollars. Pre-tax retirement accounts that italicare/italic subject to RMDs in 2026 include:

• Traditional IRA, including rollover IRAs
• SEP IRA and SIMPLE IRA (self-employed and small-business plans)
• 401(k), 403(b), and governmental 457(b) plans
• Profit-sharing, money purchase, and other defined-contribution employer plans

Accounts that are not subject to lifetime RMDs in 2026:

• Roth IRA — never has been, never will be while the original owner is alive
• Roth 401(k) and Roth 403(b) — newly exempt as of January 1, 2024 thanks to Secure Act 2.0
• Health Savings Accounts — HSAs have no RMD requirement at any age

If you have multiple pre-tax accounts, the IRS calculates an RMD separately for each one. With IRAs, you can total them up and take the full required amount from any single IRA, but 401(k)s have to pay their own RMD individually — you cannot pool them. Mix that rule up and you can be technically short on Plan A even if Plan B was overdrawn.

How is the RMD amount actually calculated?

The arithmetic is simpler than the IRS-speak suggests. You take the December 31, 2025 balance of the account, then divide it by a life-expectancy factor pulled from the IRS Uniform Lifetime Table (Appendix B of Publication 590-B). The number you get is the dollar amount you must withdraw during 2026.

For the first three RMD ages, the 2026 Uniform Lifetime Table denominators are:

• Age 73: divisor 26.5
• Age 74: divisor 25.5
• Age 75: divisor 24.6

A practical example. Suppose a 73-year-old retiree had $500,000 in a traditional IRA on December 31, 2025. The 2026 RMD is $500,000 divided by 26.5, or roughly $18,868. That entire amount becomes taxable income on the 2026 federal return, taxed at the retiree’s marginal rate under the 2026 federal tax brackets. State income tax can layer on top, depending on where you live.

The Uniform Lifetime Table is unchanged for 2026 versus 2025 — the IRS last refreshed it in 2022. A separate, longer-life table called the italicJoint Life and Last Survivor Expectancy/italic Table applies in one narrow case: when your sole beneficiary is a spouse more than 10 years younger than you. In that situation, the divisor is bigger and your RMD is smaller.

When is the deadline?

For most retirees, the deadline is December 31 of the RMD year. Miss it and the excise tax clock starts the next morning.

The one exception is your first RMD. You are allowed to delay it until April 1 of the year after you turn 73. So a 1953-born retiree turning 73 in 2026 can take the 2026 RMD as late as April 1, 2027. The catch most people don’t see coming: the second RMD (for tax year 2027) is still due December 31, 2027, which means delaying your first RMD pushes italictwo/italic years of taxable distributions into the same calendar year. For higher-balance accounts that can throw you into a higher tax bracket, raise your Medicare Part B and Part D premiums via IRMAA surcharges, and tax up to 85% of your Social Security benefit. Most tax advisors recommend taking the first RMD in the year you turn 73 and skipping the April-1 grace window unless cash flow demands otherwise.

What happens if you miss an RMD?

Before Secure Act 2.0, the IRS applied a 50% excise tax to any RMD shortfall — punitive enough that it functioned as a deterrent. Secure Act 2.0 cut that to a 25% excise tax on the amount you should have withdrawn but didn’t, effective for tax years beginning after December 31, 2022.

There’s a second, often-missed reduction inside the same provision: if you correct the missed RMD within two years — meaning you actually withdraw the missing amount and file IRS Form 5329 reporting both the shortfall and the correction — the excise tax drops further to 10%. The two-year correction window resets nothing else; if the original RMD was due December 31, 2026, the correction has to clear by December 31, 2028.

The IRS can also waive the penalty entirely if you can demonstrate italicreasonable error/italic and that you are taking reasonable steps to fix it. Common acceptable reasons: serious illness, death in the family, custodian errors, natural disasters. You attach a letter of explanation to Form 5329. Anecdotally, the IRS waives the great majority of first-time, good-faith requests — but it is not automatic and there are no guarantees.

The five most expensive RMD mistakes

After years of looking at the same patterns, five errors do the most damage:

• Forgetting an old 401(k) from a former employer. The IRS doesn’t care that you haven’t logged in for a decade — if it’s pre-tax money, it owes an RMD. Roll former-employer plans into a single IRA before age 73 and the bookkeeping gets dramatically simpler.
• Confusing the IRA aggregation rule with the 401(k) rule. IRAs can be aggregated. 401(k)s cannot. Withdraw your IRA RMD from any IRA you want; withdraw each 401(k)’s RMD from that specific 401(k).
• Delaying the first RMD without modeling the 2-in-1 tax year. The April-1 grace window helps cash flow but can spike your bracket, IRMAA, and Social Security taxability the following year.
• Ignoring the still-working exception. If you still work past 73 and are not a 5%-plus owner of the company, you can italicusually/italic delay RMDs from italicthat employer’s/italic plan only — IRAs and former-employer 401(k)s still pay. Confirm your plan document language; it isn’t automatic.
• Withdrawing from the wrong account when you have a mix. If a non-Roth retiree has a traditional 401(k) italicand/italic a Roth IRA, withdrawing from the Roth pays no RMD obligation — it just shrinks the tax-free pot.

Smart moves before December 31

If 2026 is your first RMD year, the highest-leverage moves are administrative, not investment.

First, confirm the December 31, 2025 balance on every account that owes an RMD. Most custodians publish the RMD number on the January statement; verify it against your own divisor math.

Second, consider a Qualified Charitable Distribution. If you are 70½ or older, you can direct up to $111,000 per person in 2026 — up from $108,000 in 2025 — from a traditional IRA straight to a qualified charity. The amount counts toward your RMD but is excluded from taxable income, and it works whether you itemize or take the standard deduction. It is one of the cleanest tax-planning tools the IRS still allows.

Third, decide on withholding. RMDs are eligible for federal income-tax withholding at custodian-set rates; you can opt in to have 10%, 20%, or more held back at the source. Doing so often avoids estimated-tax filings and is simpler than writing quarterly checks to the Treasury.

The point of an RMD isn’t that the IRS wants to punish you. It’s that the deferral clock eventually runs out. Plan the withdrawal — don’t let it surprise you in December — and the rule does what it was designed to do: deliver retirement income in a sequence that fits your tax life, not the government’s calendar.

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