Required Minimum Distributions (RMDs): Rules, Ages, and Strategies

Required Minimum Distributions are the IRS’s way of ensuring that tax-deferred retirement accounts eventually get taxed. Once you reach a certain age, you must withdraw a minimum amount each year from your Traditional IRA, 401(k), and other pre-tax accounts — whether you need the money or not. Miss a distribution and the penalty is severe. Plan ahead and you can minimize the tax damage significantly. The IRS RMD page covers the authoritative rules, tables, and worksheets.

SECURE 2.0, signed into law in December 2022, made the most significant changes to RMD rules in decades. Understanding these changes is essential for anyone approaching retirement or already taking distributions.

When RMDs Start: The SECURE 2.0 Timeline

The age at which RMDs begin has shifted multiple times in recent legislation:

If you were born in 1955, your first RMD year is the year you turn 73 — which is 2028. If you were born in 1962, you don’t face RMDs until 2037, when you turn 75. That extra two-year window creates meaningful additional time for Roth conversions before mandatory distributions begin.

The Still-Working Exception

If you are still employed and participating in your employer’s 401(k), 403(b), or 457(b), you can delay RMDs from that specific plan until April 1 of the year after you retire — as long as you don’t own more than 5% of the company. This exception does not apply to IRAs. If you have a Traditional IRA, RMDs begin at 73 (or 75) regardless of employment status.

Which Accounts Are Subject to RMDs

Subject to RMDs:

• Traditional IRA
• SEP IRA
• SIMPLE IRA
• 401(k) — traditional (pre-tax) contributions and employer match
• 403(b)
• 457(b) — governmental plans

Not subject to RMDs during the owner’s lifetime:

• Roth IRA — no RMDs, ever, for the original owner
• Roth 401(k) — starting in 2024, SECURE 2.0 eliminated RMDs for designated Roth accounts in employer plans. Prior to 2024, Roth 401(k) balances were subject to RMDs unless rolled to a Roth IRA

The Roth 401(k) change is one of the most consequential in SECURE 2.0. Previously, the standard advice was to roll Roth 401(k) money into a Roth IRA before RMD age to avoid forced distributions. That rollover is no longer necessary for RMD purposes, though you may still want to do it for investment flexibility or estate planning reasons.

How to Calculate Your RMD

The formula is straightforward:

RMD = Prior-year Dec 31 account balance ÷ IRS life expectancy factor

The IRS publishes three life expectancy tables. Most people use the Uniform Lifetime Table, which assumes a beneficiary 10 years younger than the account owner. Key factors from this table:

A retiree with a $600,000 Traditional IRA at age 73 has an RMD of $600,000 ÷ 26.5 = $22,642. At age 85, if the account has grown to $700,000, the RMD is $700,000 ÷ 16.0 = $43,750 — nearly double, and stacking on top of Social Security and any other income.

The Joint Life Table Exception

If your sole beneficiary is a spouse who is more than 10 years younger, you use the Joint Life and Last Survivor Expectancy Table instead, which produces a larger divisor and therefore a smaller RMD. This is the only beneficiary relationship that qualifies for the more favorable table.

Multiple Accounts

If you have multiple Traditional IRAs, you calculate the RMD for each one separately but can take the total from any one or combination of your IRAs. You cannot, however, aggregate across account types — a 401(k) RMD must come from that 401(k), and a 403(b) RMD must come from 403(b) accounts.

The First-Year Deadline Trap

Your first RMD must be taken by April 1 of the year after you turn 73. Every subsequent RMD is due by December 31. This creates a dangerous overlap: if you delay your first RMD to the following April, you’ll need to take two RMDs in the same calendar year — the delayed first-year distribution and the current-year distribution.

Example: Sarah turns 73 in 2028. She can delay her first RMD until April 1, 2029. But her 2029 RMD is also due by December 31, 2029. That means two full RMDs hit her taxable income in 2029 — potentially pushing her into a higher tax bracket, triggering additional Social Security taxation, or crossing an IRMAA threshold for Medicare surcharges.

Strategy: Take your first RMD in the year you turn 73, not the following April. The single-year tax cost is almost always lower than the double-distribution year.

Penalties for Missed RMDs

SECURE 2.0 softened the penalty for missed distributions:

• 25% excise tax on the amount of the shortfall (down from 50% under prior law)
• 10% excise tax if the shortfall is corrected within a two-year correction window
• File Form 5329 with your tax return to report the shortfall and any penalty

The correction window is a meaningful safety net. If you discover a missed or short RMD, take the distribution as soon as possible and file an amended or corrected return. The IRS has historically been lenient when the error is caught and corrected promptly.

Strategies to Minimize the Tax Impact of RMDs

Roth Conversions Before RMD Age

The most powerful RMD reduction strategy happens years before RMDs begin. Every dollar converted from a Traditional IRA to a Roth IRA reduces the future RMD base. The ideal window is between retirement and age 73 (or 75), when your income may be temporarily low — before Social Security and RMDs create a floor on taxable income.

If you retire at 60 and delay Social Security to 67 or 70, you may have 7–15 years of low-bracket income. Systematically converting Traditional IRA balances to Roth during this window — filling the 12% or 22% bracket each year — can dramatically reduce or even eliminate future RMDs. The tax paid at 12–22% during the conversion years is almost certainly less than the 24–32% rate that large RMDs would create in your 70s and 80s.

Qualified Charitable Distributions (QCDs)

A QCD allows you to transfer up to $105,000 per year (2024 limit, adjusted annually for inflation) directly from your IRA to a qualified charity. The distribution counts toward your RMD but is excluded from your adjusted gross income. For retirees who donate to charity, this is one of the most tax-efficient moves available:

• Satisfies the RMD — no penalty
• Excludes the amount from AGI — unlike a normal withdrawal followed by a charitable deduction
• Reduces exposure to Social Security taxation, IRMAA surcharges, and net investment income tax — all of which key off AGI or MAGI

To qualify, you must be at least 70.5 years old (this age was not changed by SECURE 2.0), the transfer must go directly from the IRA custodian to the charity, and it must be to a public charity — not a donor-advised fund or private foundation.

Bracket Management and Withdrawal Sequencing

RMDs don’t exist in isolation. They stack on top of Social Security, pension income, investment income, and any other taxable sources. Understanding how all these income streams interact is key:

• Social Security taxation: Up to 85% of Social Security benefits become taxable when combined income exceeds $34,000 (single) or $44,000 (married filing jointly). Large RMDs can push otherwise low-tax Social Security into near-full taxation.
• IRMAA surcharges: Medicare Part B and Part D premiums increase at specific MAGI thresholds. A single filer crossing $106,000 in MAGI pays approximately $900/year in additional premiums. RMDs are a common trigger.
• Net investment income tax: The 3.8% surtax on investment income applies above $200,000 (single) or $250,000 (married). While RMD income itself isn’t investment income, it raises MAGI, which can make capital gains and dividends subject to the surtax.

The retirement withdrawal order strategy covers how to sequence distributions from taxable, tax-deferred, and tax-free accounts to manage these thresholds.

The Super Catch-Up: Ages 60–63

SECURE 2.0 introduced enhanced catch-up contributions for participants aged 60–63. Starting in 2025, this group can contribute $11,250 per year in catch-up contributions to a 401(k) or 403(b) — up from the standard $7,500 catch-up for those 50 and older. If your income exceeds $145,000, these catch-ups must go into a Roth account. For high earners, this forces more savings into Roth — which, while taxed now, reduces future RMD exposure.

RMDs vs Canadian RRIF Minimums

The US RMD system has a close parallel in Canada’s RRIF minimum withdrawals. Both force retirees to draw down tax-deferred accounts on a government-set schedule. Key differences:

Canadian RRIF minimums are more aggressive — higher starting rates that escalate faster. But both systems reward the same planning approach: reduce the tax-deferred balance before mandatory distributions begin, using Roth conversions (US) or RRSP meltdown withdrawals (Canada) during low-income years.

Common RMD Mistakes

Forgetting inherited accounts. If you inherit a Traditional IRA, different RMD rules apply — most non-spouse beneficiaries must empty the account within 10 years under the SECURE Act. The inherited account’s RMD is separate from your own.

Not aggregating IRA RMDs correctly. You must calculate the RMD for each IRA, but you can withdraw the total from any combination. Many retirees forget to include all accounts in the calculation or miss a small, forgotten IRA.

Waiting until December. Taking your RMD in the last week of December invites processing delays. If the distribution doesn’t clear by December 31, you’ve missed it. Take it by early December or set up automatic distributions.

Confusing account types. A 401(k) RMD cannot be satisfied by an IRA withdrawal and vice versa. 403(b) accounts can be aggregated with other 403(b)s, but not with IRAs.

How cinder.fi Helps

cinder.fi projects your RMDs year by year alongside Social Security, investment income, and all other sources. The planner calculates your effective tax rate at every age, models the impact of Roth conversions on future RMD obligations, and shows how RMDs interact with IRMAA thresholds and Social Security taxation. The scenario comparison tool lets you run a no-conversion baseline against a Roth conversion strategy to see the lifetime tax difference — and how much smaller your RMDs become.

Model this in your own plan — try cinder.fi free.