Required Minimum Distributions: When They Start

What are required minimum distributions (RMDs), and when do they start?

Required minimum distributions, or RMDs, are the annual withdrawals the Internal Revenue Service (IRS) requires from most tax-deferred retirement accounts. Most people start RMDs at age 73 or 75, depending on their birth year, though some who turned 70½ before 2020 already started earlier. The amount changes every year based on your age and your account balance.

The rules changed substantially under the SECURE 2.0 Act, a 2022 federal law that reshaped several retirement account provisions. This article covers when RMDs start, how they are calculated, what happens if you miss a deadline, and how RMDs fit into a broader retirement income plan.

What Is a Required Minimum Distribution?

An RMD is the minimum amount you must withdraw each year from certain retirement accounts. That includes traditional individual retirement accounts (IRAs), SEP IRAs, SIMPLE IRAs, and most employer-sponsored plans such as 401(k) and 403(b) accounts. These withdrawals are taxed as ordinary income in the year you take them. The exception is any portion that was already taxed.

The rule exists because money in these accounts grew tax-deferred. The IRS eventually requires that deferred tax to be paid. Roth IRAs are not subject to RMDs during the original owner's lifetime. Since 2024, Roth 401(k) and Roth 403(b) accounts follow the same exemption.

When Do Required Minimum Distributions Start?

The age RMDs begin depends on your birth year, and it has changed more than once. Anyone who reached 70½ before 2020 was already required to start RMDs at that age, and that schedule continues for them today. Under the SECURE 2.0 Act, account owners born between 1951 and 1959 begin RMDs at age 73. Those born in 1960 or later begin at age 75. That range is why two people the same age can be on different RMD schedules.

Your first RMD carries a special deadline. You can delay it until April 1 of the year after you reach the applicable age, rather than taking it by December 31 of that year. After the first year, the deadline is always December 31. There is no tax benefit to waiting until late in the year. The amount owed is the same in January as it is in December.

That first-year delay can still create a timing issue worth planning around. If you wait until April 1 to take your first RMD, you will still owe a second RMD by December 31 of that same year. That means two taxable distributions land in one tax year. Depending on your other income, that combination can push you into a higher tax bracket or affect your Medicare premium calculations. If you're weighing RMD timing against other income sources, our year-end tax moves guide walks through more of what to consider before December 31.

How Is My RMD Calculated?

Each year's RMD is calculated by dividing your account balance as of December 31 of the prior year by a life expectancy factor from the IRS Uniform Lifetime Table, or, for certain spousal beneficiaries, the Joint Life and Last Survivor Table. Both the age factor and the account balance change every year. That means the dollar amount changes too, even if you never manually recalculate anything. The result is the minimum you must withdraw for the year. You can withdraw more if you choose, though additional withdrawals also add to that year's taxable income.

RMD rules apply differently depending on the account type:

• Traditional IRAs, SEP IRAs, and SIMPLE IRAs: subject to RMDs starting at the applicable age

• 401(k), 403(b), and most other employer-sponsored plans: subject to RMDs, generally calculated separately for each plan

• Roth IRAs: not subject to RMDs during the original owner's lifetime

• Roth 401(k) and Roth 403(b) accounts: no longer subject to RMDs during the original owner's lifetime, effective 2024

If you have multiple traditional IRAs, you can total the RMDs across those accounts. You can then withdraw the combined amount from one IRA or several. Employer-plan RMDs generally cannot be combined with IRA RMDs or with each other. Each 401(k) or 403(b) typically requires its own withdrawal.

What Happens If I Miss My RMD Deadline?

An RMD you do not withdraw by the deadline is subject to an excise tax on the shortfall. The SECURE 2.0 Act reduced that penalty from 50% to 25% of the amount not withdrawn. It can drop to 10% if you correct the mistake within two years.

Correcting a missed RMD generally means withdrawing the missed amount as soon as you identify the error. You then file IRS Form 5329 to request a waiver of the penalty for reasonable cause. Working with a tax preparer on that process can help make sure the correction is documented properly. A missed RMD is a fixable mistake, not a reason to panic. It is also not something to leave sitting until next year's tax season.

Can I Direct My RMD to a Charity?

A qualified charitable distribution, or QCD, lets an IRA owner age 70½ or older transfer funds directly from an IRA to a qualified charity. The transfer can satisfy some or all of that year's RMD, and it is excluded from taxable income. That can be a meaningful difference from taking the distribution and donating it afterward. For 2026, the QCD limit is $111,000 per individual, an amount indexed for inflation each year.

The transfer must go directly from the IRA custodian to the charity. Funds that pass through your hands first do not qualify, even if you donate them later. A QCD is also not automatically the right choice for every donor. It depends on whether you itemize deductions, your giving plans, and your broader tax picture.

One timing detail to build into year-end planning: a QCD only counts toward that year's RMD if the charity actually receives and cashes the check by December 31, not simply if it is mailed by year-end. Processing times at charities and custodians can vary, especially close to the holidays, so initiate a QCD well before December 31 to avoid missing the deadline.

Coordinating RMDs with the Rest of Your Retirement Income

RMDs rarely stand alone. Because they count as ordinary income, they can affect other parts of your tax return. That includes how much of your Social Security income is taxable and whether your Medicare premiums increase under the income-related monthly adjustment amount, or IRMAA, which Medicare uses to set higher premiums for higher-income beneficiaries.

The Social Security Administration notes that up to 85% of Social Security benefits can become taxable, depending on a household's total income. RMDs count toward that total. On the Medicare side, IRMAA surcharges are based on tax return data from two years prior. A larger RMD this year can mean higher Part B or Part D premiums two years from now.

A few questions to revisit each year as your RMDs begin:

• How does this year's RMD affect your current tax bracket, and is there room for additional planning before year-end?

• Could the RMD push your income near an IRMAA threshold that would raise Medicare Part B or Part D premiums two years later?

• Is a QCD a better fit than a standard withdrawal for part or all of this year's RMD?

• Has withholding been set correctly on the distribution to avoid a surprise at tax time?

These are also good questions to run through our annual financial checklist, which covers year-end items beyond just RMDs.

These questions do not have a single right answer. The best approach depends on your account balances, your other income sources, and your broader plan. If you would like to talk through how required minimum distributions fit into your income and tax picture, schedule a call with our team. We work with individuals and families across Toledo, Sylvania, Perrysburg, Maumee, and the rest of Northwest Ohio on this kind of year-end planning, and we're happy to walk through your specific RMD schedule with you before a deadline is close.