What RMDs are and why they exist. Traditional retirement accounts are a deal with the government: you skip tax on contributions and growth for decades, but the IRS eventually wants its cut. RMDs enforce that — starting at your RMD age, you must withdraw a minimum amount each year and pay ordinary income tax on it, whether or not you need the money. The rules apply to traditional IRAs, 401(k)s, 403(b)s, and similar pre-tax accounts.
The ages under SECURE 2.0. The starting age has been marching upward. It was 70½ for years, moved to 72, and under the SECURE 2.0 Act of 2022 became 73 for anyone reaching that age after 2022 (born 1951–1959). It's scheduled to rise again to 75 for those born in 1960 or later, effective 2033. Knowing your exact RMD age matters, because it defines the length of your low-tax "gap years" for conversions and bracket-filling.
How the amount is computed. Each year's RMD equals your account balance as of the prior December 31, divided by a factor from the IRS Uniform Lifetime Table. At 73 the factor is about 26.5 (roughly a 3.8% withdrawal); the factor shrinks each year, so the percentage you must take climbs steadily — around 4% in your mid-70s, ~5% around 80, and higher from there. This rising schedule is why a large pre-tax balance can produce ballooning taxable income late in retirement, dragging Social Security into tax and tripping IRMAA. You can always take more than the RMD; you just can't take less.
The penalty (now less brutal). Historically, missing an RMD carried a punishing 50% excise tax on the amount you failed to withdraw. SECURE 2.0 cut that to 25%, and to just 10% if you correct the shortfall within a short correction window and file the right form. Still painful — and easily avoided by taking the distribution before December 31 (or, for your first RMD only, by April 1 of the following year).
The first-year timing trap. Your very first RMD can be deferred to April 1 of the year after you turn 73. Tempting — but if you wait, you must take two RMDs in that second year (the delayed first one plus that year's), potentially spiking your income, your bracket, your Social Security taxation, and your IRMAA all at once. Usually it's better to take the first RMD in the year you turn 73 and avoid the double-up.
Roth accounts escape entirely. Roth IRAs have never had RMDs for the original owner. And as of 2024, SECURE 2.0 eliminated RMDs from Roth 401(k)s too. This is a major planning point: every dollar you move into Roth (via conversions in your 60s) is a dollar removed from the RMD machine — it won't force taxable income later, won't tax your Social Security, and won't push you toward an IRMAA tier.
QCDs: turn a tax bill into a gift. If you're 70½ or older, a Qualified Charitable Distribution lets you send money directly from your IRA to a qualified charity — up to about $108,000 in 2026 (indexed annually) — and it counts toward your RMD while being excluded from your taxable income entirely. That's better than taking the RMD and then donating: a QCD lowers your AGI directly, which can also help with Social Security taxation and IRMAA. For charitably inclined retirees, it's one of the most efficient moves available.
A QCD that satisfies an RMD
A 75-year-old has $800,000 in a traditional IRA and a ~24.6 life-expectancy factor, giving an RMD of about $32,500 he doesn't need for spending. Taken as income, it lands on top of his Social Security and could nudge his MAGI toward an IRMAA line. Instead he directs $20,000 of it to his church as a QCD — satisfying that portion of the RMD with zero addition to his taxable income — and takes the remaining $12,500 as cash. He meets the requirement, supports his charity, and keeps his AGI (and Medicare premiums) lower.
Aggregation rules (a practical detail). If you have multiple IRAs, you can total their RMDs and take the whole amount from any one of them. But 401(k)s must each satisfy their own RMD separately — you can't take a 401(k)'s RMD from an IRA or vice versa. Get this wrong and you can accidentally under-withdraw.
A decade of RMDs on a $1,000,000 IRA
Numbers make the rising schedule concrete. Suppose you turn 73 with exactly $1,000,000 in a traditional IRA as of the prior December 31, the account earns a steady 6% a year, and you withdraw only the required minimum — nothing more — each year at year-end. Each year's RMD is the January 1 balance (that prior year-end value) divided by your Uniform Lifetime Table factor. Because the factor shrinks every year, the required percentage (which is simply 1 ÷ factor) climbs steadily even though your dollars keep growing.
| Age | Jan 1 balance (prior Dec 31) | ULT factor | RMD (÷ factor) | RMD % | Growth @ 6% | Dec 31 balance |
|---|---|---|---|---|---|---|
| 73 | $1,000,000 | 26.5 | $37,736 | 3.8% | $60,000 | $1,022,264 |
| 74 | $1,022,264 | 25.5 | $40,089 | 3.9% | $61,336 | $1,043,511 |
| 75 | $1,043,511 | 24.6 | $42,419 | 4.1% | $62,611 | $1,063,703 |
| 76 | $1,063,703 | 23.7 | $44,881 | 4.2% | $63,822 | $1,082,644 |
| 77 | $1,082,644 | 22.9 | $47,278 | 4.4% | $64,959 | $1,100,325 |
| 78 | $1,100,325 | 22.0 | $50,015 | 4.5% | $66,020 | $1,116,330 |
| 79 | $1,116,330 | 21.1 | $52,906 | 4.7% | $66,980 | $1,130,404 |
| 80 | $1,130,404 | 20.2 | $55,961 | 5.0% | $67,824 | $1,142,267 |
| 81 | $1,142,267 | 19.4 | $58,881 | 5.2% | $68,536 | $1,151,922 |
| 82 | $1,151,922 | 18.5 | $62,266 | 5.4% | $69,115 | $1,158,771 |
| 83 | $1,158,771 | 17.7 | $65,467 | 5.6% | $69,526 | $1,162,830 |
| 84 | $1,162,830 | 16.8 | $69,216 | 6.0% | $69,770 | $1,163,384 |
| 85 | $1,163,384 | 16.0 | $72,712 | 6.3% | $69,803 | $1,160,475 |
What the table shows. Three things worth internalizing:
- The percentage climbs relentlessly. The required draw rises from 3.8% at 73 to 6.3% at 85 — and keeps going (it passes 8% by the early 90s and ~10% by 97). That is baked into the shrinking factor, regardless of markets.
- Growth hides it — for a while. At 6% returns the balance keeps growing through your late 70s and early 80s, because 6% growth still outruns a 4–5% required draw. The balance peaks near age 84 (~$1.16M) and only then begins to decline, once the required percentage finally overtakes the growth rate.
- The tax bill is real even if you don't need the money. Over these 13 years you're forced to withdraw about $700,000 of fully taxable income — yet the account is still larger than where it started. A big pre-tax balance doesn't shrink out of the way; it keeps generating taxable RMDs (and Social Security taxation and IRMAA exposure) for the rest of your life. That is the case for shrinking it early with conversions and QCDs.
Figures are rounded and assume a flat 6% return, a single beneficiary (Uniform Lifetime Table), and RMDs taken at year-end; real returns vary and a much-younger spouse would use the smaller draws of the Joint Life table. Factors are from the current IRS Uniform Lifetime Table — see Appendix E for the full tables.