What an RMD actually is
A required minimum distribution is the amount the IRS forces you to pull out of a tax-deferred account each year, whether you need the money or not. It applies to traditional IRAs, SEP and SIMPLE IRAs, and most employer plans like 401(k)s. Roth IRAs are exempt during your lifetime. Under current rules, RMDs start at age 73 if you were born between 1951 and 1959, and at age 75 if you were born in 1960 or later. Skip one, or take less than required, and the penalty is steep: a 25% excise tax on the shortfall, which drops to 10% if you correct it within two years.
How the amount gets calculated
Take your account balance as of December 31 of the prior year, then divide by a life-expectancy factor from the IRS Uniform Lifetime Table. A $500,000 balance at age 75 uses a factor of 24.6, which works out to roughly $20,325 for the year. The number isn’t fixed: it shrinks every year as the divisor gets smaller, so the required withdrawal as a percentage of your balance climbs the longer you live. If you have several traditional IRAs, you can total the RMDs and take the combined amount from just one of them. Workplace plans don’t work that way — each 401(k) needs its own withdrawal.
Where RMDs collide with the rest of your taxes
An RMD counts as ordinary income the moment it lands in your account, even if you don’t spend a dollar of it. That income can push more of your Social Security into taxable territory, and if you’re on Medicare, it’s exactly the kind of income spike that triggers an IRMAA surcharge two years later. A retiree who takes a $40,000 RMD on top of Social Security and a pension can end up with a materially higher Medicare premium without ever noticing the connection until the surcharge notice arrives.
A few ways to soften the hit
Qualified charitable distributions let you send up to $111,000 directly from an IRA to a charity in 2026, and the amount counts toward your RMD without showing up as taxable income. Roth conversions done in the years before RMDs start can shrink the traditional-IRA balance the formula is based on, which lowers every future RMD. If you’re still working past your RMD age and don’t own more than 5% of the company, your current employer’s plan may let you delay RMDs from that one account — though any IRA you hold still has to follow the regular schedule.
