Required Minimum Distributions: What You Need to Know Before December 31
Tax-deferred retirement savings cannot stay tax-deferred forever. Federal law requires owners of most retirement accounts to begin withdrawing a minimum amount each year once they reach a certain age, and it requires most beneficiaries who inherit those accounts to empty them on a set schedule. These withdrawals are called required minimum distributions, or RMDs. With the 2026 deadline approaching, here is a plain-English refresher on who is affected, how much you must take, and when.
What is an RMD?
An RMD is the minimum amount you must withdraw from a retirement account each year. You can always take more. The amount is generally your account balance as of December 31 of the prior year divided by a life-expectancy factor from the IRS Uniform Lifetime Table. A different table applies if your sole beneficiary is a spouse who is more than 10 years younger than you.
Which accounts are covered?
The RMD rules apply to:
- Traditional IRAs, SEP IRAs, and SIMPLE IRAs
- 401(k), 403(b), and 457(b) plans
- Profit-sharing and other defined contribution plans
- Defined benefit pension plans (which satisfy the rules through annuity payments)
Roth accounts are different. Roth IRA owners are not required to take lifetime RMDs, nor do owners of designated Roth accounts in 401(k) and 403(b) plans. Beneficiaries who inherit Roth accounts are still subject to the RMD rules. While withdrawals of contributions and most withdrawals of earnings from an inherited Roth are tax-free, withdrawals of earnings may be subject to income tax if the Roth account is less than 5-years old at the time of the withdrawal. Roth IRAs cannot be aggregated for purposes of taking RMDs unless they are inherited from the same decedent.
When do RMDs start?
The SECURE Act and SECURE 2.0 Act raised the starting age, so the age that applies to you depends on when you were born:
| Date of birth | Applicable age | Required beginning date (first RMD) |
|---|---|---|
| July 1, 1949 – December 31, 1950 | 72 | April 1 of the year after reaching 72 |
| January 1, 1951 – December 31, 1959 | 73 (1959 cohort: see note) | April 1 of the year after reaching 73 |
| January 1, 1960 or later | 75 | April 1 of the year after reaching 75 (earliest: April 1, 2036) |
A note on 1959. As drafted, SECURE 2.0 assigns people born in 1959 to both age 73 and age 75. Proposed Treasury regulations would resolve this by applying age 73. Until that guidance is final, people born in 1959 should plan on age 73.
The first-year trap. You may wait until April 1 of the year after you reach your applicable age to take your first RMD. If you do, you will owe two RMDs that year: the delayed first one by April 1 and the second one by December 31. For example, someone who turns 73 in 2026 may take the 2026 RMD as late as April 1, 2027, but must also take the 2027 RMD by December 31, 2027. Taking two RMDs in one year can push you into a higher tax bracket.
Still working? If you still work for the company that sponsors your 401(k) or similar plan, the plan may let you delay RMDs from that plan until April 1 of the year after you retire. This exception does not apply to IRAs or to anyone who owns more than 5% of the employer. Your plan can also choose not to offer it.
The December 31 deadline
After your first RMD, every later RMD must be taken by December 31 of the year it is due. For 2026, that date is Thursday, December 31, 2026. Financial institutions often need several weeks to process withdrawals, so do not wait until the last week of the year.
Inherited accounts and the 10-year rule
If the account owner died after 2019, most non-spouse beneficiaries must empty the inherited account by the end of the 10th year after the year of death. For example, if the owner died in 2020, the account must be fully distributed by December 31, 2030.
Some beneficiaries, called eligible designated beneficiaries, may still stretch withdrawals over their own life expectancy:
- A surviving spouse
- A minor child of the account owner (until the child reaches the age of majority, after which the 10-year clock starts)
- A disabled or chronically ill individual
- Anyone not more than 10 years younger than the account owner
Annual withdrawals may be required inside the 10 years. If the original owner had already reached the required beginning date before death, the beneficiary must take annual RMDs in years 1 through 9 and empty the account in year 10. The IRS waived penalties for missed annual withdrawals from 2021 through 2024 while it finalized its rules, but that relief has ended. Annual RMDs have been enforced since 2025. The waiver also did not extend the 10-year deadline.
What happens if you miss an RMD?
The IRS charges an excise tax equal to 25% of the amount you should have withdrawn but did not. If you correct the shortfall promptly, generally by the end of the second year after the year you missed, the tax drops to 10%. You report the shortfall on IRS Form 5329, and you can ask the IRS to waive the tax if the failure was due to reasonable error and you are taking steps to fix it.
Key dates at a glance
- December 31, 2026: Deadline for 2026 RMDs, including annual RMDs owed by beneficiaries under the 10-year rule
- April 1, 2027: Latest date to take the first RMD for anyone who turns 73 in 2026 (born in 1953)
- December 31, 2027: Deadline for the second RMD for that same group
- January 31 each year: IRA custodians must send you a statement of your RMD or offer to calculate it
- September 30 of the year after death: Date used to determine an inherited account's beneficiaries
The bottom line
RMDs are easy to overlook, and mistakes can be costly. If you are approaching your applicable age, have recently inherited a retirement account, or are still working past 73, now is a good time to review your accounts and beneficiary designations with your advisors.
DISCLAIMER: This summary is not legal advice and does not create any attorney-client relationship. This summary does not provide a definitive legal opinion for any factual situation. Before the firm can provide legal advice or opinion to any person or entity, the specific facts at issue must be reviewed by the firm. Before an attorney-client relationship is formed, the firm must have a signed engagement letter with a client setting forth the Firm’s scope and terms of representation. The information contained herein is based upon the law at the time of publication.