Required Minimum Distributions: How the RMD Is Calculated
October 29, 2026
Traditional IRAs and most employer retirement plans require you to start withdrawing money at a certain age, whether you need it or not. These required minimum distributions (RMDs) ensure that tax-deferred savings are eventually taxed. The amount is the account balance at the end of the previous year divided by a distribution period (divisor) from an IRS life-expectancy table.
Under current law, RMDs begin at age 73 for those born 1951 to 1959 and at 75 for those born in 1960 or later. The first RMD can be delayed until April 1 of the following year, but then you must take two in that year. Roth IRAs do not require RMDs for the original owner.
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The Uniform Lifetime Table (used by most account owners) gives divisors that fall as you age: about 26.5 at age 73, 24.6 at 75, 20.2 at 80, 16.0 at 85, and 12.2 at 90. At 73, with $500,000 at the prior December 31, the RMD is $500,000 ÷ 26.5 = $18,868, or 3.8% of the balance. At 80, with $400,000: $400,000 ÷ 20.2 = $19,802, or 4.95%. At 85, with $300,000: $300,000 ÷ 16.0 = $18,750, or 6.25%. The required percentage rises each year, so withdrawals increase as a share of the account.
Check the current IRS table, since it has been updated; if your spouse is more than 10 years younger and the sole beneficiary, a different table gives smaller RMDs.
| Age | Balance at prior year-end | Divisor | RMD | Percent of balance |
|---|---|---|---|---|
| 73 | $500,000 | 26.5 | $18,868 | 3.8% |
| 80 | $400,000 | 20.2 | $19,802 | 4.95% |
| 85 | $300,000 | 16.0 | $18,750 | 6.25% |
| 90 | $200,000 | 12.2 | $16,393 | 8.2% |
Multiple Accounts and Penalties
Calculate the RMD for each IRA separately, then total them; you may withdraw the total from any one IRA or a combination. For 401(k)s and 403(b)s, each plan's RMD must come from that plan. The penalty for missing an RMD has been 25% of the amount not withdrawn (reduced to 10% if corrected promptly), previously 50%. The withdrawal is taxed as ordinary income, which could push you into a higher bracket or affect Medicare premiums.
Planning Ideas
Withdraw from different accounts earlier, or convert part of a traditional IRA to a Roth in lower-income years to reduce future RMDs. Qualified charitable distributions (QCDs) let those aged 70½ and older send up to an annual limit directly from an IRA to charity, counting toward the RMD but not included in taxable income. Remember that the RMD is a minimum; you can take more. If you don't need the money, you can reinvest it in a taxable account.
Caveats
Rules have changed with recent legislation and differ for inherited accounts (most non-spouse beneficiaries must empty the account within 10 years). Confirm current ages and tables with the IRS or a tax professional. This article is educational and uses figures from the Uniform Lifetime Table as an illustration.
Frequently Asked Questions
How is an RMD calculated?
The prior December 31 balance divided by the IRS divisor for your age.
At what age do RMDs begin?
73 or 75 depending on birth year.
Do Roth IRAs have RMDs?
Not for the original owner.
What is the penalty for missing an RMD?
25% of the shortfall, possibly reduced to 10% if corrected quickly.
What is a QCD?
A direct IRA transfer to charity that can count toward the RMD without being taxable income.