Required Minimum Distributions: Rules and Strategies 2025

Once you reach a certain age, the government requires you to withdraw a minimum amount from your tax-deferred retirement accounts each year. These mandatory withdrawals are called Required Minimum Distributions (RMDs), and they come with strict rules and significant tax consequences.

Failing to take your RMD on time triggers one of the harshest penalties in the tax code. Understanding how RMDs work — and planning around them — is one of the most important financial tasks for retirees and those approaching retirement.

What Is a Required Minimum Distribution?

An RMD is the minimum amount the IRS requires you to withdraw from a tax-deferred retirement account each year after reaching a specific age. The requirement exists because these accounts — IRAs, 401(k)s, 403(b)s, and similar plans — were funded with pre-tax dollars and have grown tax-deferred. The government eventually wants its share.

RMDs apply to:

• Traditional IRAs (including SEP IRAs and SIMPLE IRAs)
• 401(k) plans
• 403(b) plans
• 457(b) plans (governmental)
• Most other employer-sponsored retirement accounts

Roth IRAs are the notable exception: Roth IRAs are funded with after-tax dollars, so there’s no RMD requirement during the original owner’s lifetime. However, inherited Roth IRAs do have RMD rules for non-spouse beneficiaries.

What Age Do RMDs Start?

The SECURE Act 2.0, passed in December 2022, changed the starting age for RMDs. Here’s the current framework:

• Born before 1951: RMDs started at age 70½ (old rules)
• Born 1951–1959: RMDs begin at age 73
• Born 1960 or later: RMDs begin at age 75

If you turned 73 in 2025 (born in 1952), your first RMD is due by April 1, 2026 — not December 31, 2025. This one-time first-year extension is available only for your very first RMD.

Important: If you delay your first RMD to April 1 of the following year, you must also take your second RMD by December 31 of that same year. Two RMDs in one year means more taxable income and a potentially higher tax bracket.

How to Calculate Your RMD

Your RMD is calculated by dividing your account balance (as of December 31 of the prior year) by a life expectancy factor from the IRS Uniform Lifetime Table.

Formula: RMD = Account Balance ÷ Life Expectancy Factor

The IRS updated its life expectancy tables in 2022, which slightly reduced RMD amounts across all ages (because life expectancy figures increased).

Sample RMD factors from the 2022 IRS Uniform Lifetime Table:

There is one exception to the Uniform Lifetime Table: if your sole beneficiary is your spouse and your spouse is more than 10 years younger than you, you may use the Joint Life and Last Survivor Table, which produces lower RMDs.

Multiple Accounts: Aggregation Rules

If you have multiple IRAs, you must calculate an RMD for each account separately, but you can aggregate the total and withdraw it from any combination of your IRAs. You don’t need to take a separate distribution from each account.

However, this aggregation flexibility applies only within account types:

• Traditional IRAs: RMDs can be aggregated across multiple IRAs and taken from any
• 403(b) accounts: RMDs can be aggregated across multiple 403(b)s
• 401(k) accounts: RMDs cannot be aggregated — each 401(k) must satisfy its own RMD separately

If you have both IRAs and a 401(k), you must satisfy each separately.

The Penalty for Missing an RMD

Missing an RMD or taking too little triggers a 25% excise tax on the shortfall. Prior to SECURE Act 2.0, the penalty was 50% — still 25% is severe.

The penalty drops to 10% if you correct the mistake within two years (the “correction window”).

Example: If your RMD for 2025 is $20,000 and you forget to take it, the penalty is $5,000 (25%). If you correct it within two years, the penalty drops to $2,000 (10%).

The IRS can also waive the penalty entirely for reasonable cause — typically first-time errors where you quickly take the missed distribution and file Form 5329 with a letter explaining the oversight. But don’t count on this waiver; file and pay correctly.

RMDs and Taxes

RMDs are treated as ordinary income in the year you take them. They’re added to your other income sources — Social Security, pensions, investment income — and taxed at your marginal rate.

This can create several complications:

1. Medicare IRMAA Surcharges

Large RMDs can push your Modified Adjusted Gross Income (MAGI) above IRMAA thresholds, triggering Medicare premium surcharges two years later. See our guide on IRMAA surcharges for details on how income affects Medicare costs.

2. Social Security Taxation

More income from RMDs can cause a larger portion of your Social Security benefits to become taxable. Up to 85% of Social Security can be taxed when your combined income (AGI + nontaxable interest + half of Social Security) exceeds $34,000 for singles or $44,000 for married couples.

3. Bracket Creep

As you age, your RMDs grow relative to your shrinking account balance (because the life expectancy factor decreases). Many retirees see their RMDs increase substantially in their 80s.

Qualified Charitable Distributions: The Best RMD Strategy for Charitably Inclined Retirees

If you’re 70½ or older, you can make a Qualified Charitable Distribution (QCD) directly from your IRA to a qualified charity. QCDs are:

• Not included in your taxable income
• Count toward satisfying your RMD for the year
• Limited to $105,000 per year per taxpayer in 2025 (indexed for inflation)

This is especially powerful if you take the standard deduction and wouldn’t otherwise get a tax benefit from charitable giving. By doing a QCD instead of taking the RMD and donating cash, you effectively deduct the charitable gift even without itemizing.

Example: Your RMD is $20,000 and you typically donate $5,000 to charity. By directing $5,000 of your RMD as a QCD, you reduce your taxable income by $5,000 compared to taking the full $20,000 RMD and writing a check.

Roth Conversion Before RMDs Begin

One of the best long-term strategies for managing RMDs is Roth conversion in the years between retirement and when RMDs begin. By converting portions of your traditional IRA to a Roth IRA in these “gap years,” you:

• Reduce the balance subject to future RMDs
• Pay taxes now at (potentially) lower rates
• Build tax-free income for later years
• Potentially benefit your heirs (Roth IRAs pass income-tax-free)

The optimal conversion amount each year is generally up to the top of your current tax bracket — converting just enough to maximize your bracket without crossing into the next one. A tax advisor or financial planner can help model this.

Be aware: Roth conversions also increase your MAGI, which can trigger IRMAA surcharges two years after conversion if done while on Medicare.

Still Working After 73? The “Still Working” Exception

If you’re still employed and participate in your current employer’s 401(k), you may be able to defer RMDs from that specific 401(k) until you retire — even past age 73. This exception applies only to:

• Your current employer’s plan
• Plans that allow this provision (check with your plan administrator)
• Employees who don’t own more than 5% of the company

This exception does not apply to IRAs or old 401(k) accounts from former employers. You must take RMDs from IRAs and former employer plans on schedule.

Inherited IRAs and the 10-Year Rule

The SECURE Act of 2019 significantly changed RMD rules for inherited IRAs. Most non-spouse beneficiaries who inherit an IRA after 2019 are subject to the 10-year rule: the entire inherited IRA must be distributed within 10 years of the original owner’s death.

The IRS clarified in 2024 that if the original owner had already begun taking RMDs, the beneficiary must also take annual distributions in years 1–9 (not just empty the account by year 10).

Exceptions to the 10-year rule (eligible designated beneficiaries can take RMDs over their lifetime):

• Surviving spouses
• Minor children of the deceased (until they reach the age of majority)
• Chronically ill or disabled individuals
• Beneficiaries not more than 10 years younger than the deceased

Inherited Roth IRAs are also now subject to the 10-year rule for non-spouse beneficiaries (though distributions remain tax-free).

Practical RMD Planning Checklist

• Know your RMD start date: Based on your birth year, determine when your first RMD is due
• Calculate each December 31 balance: Use the prior year-end balance for the calculation
• Set up automatic distributions: Many IRA custodians can automatically calculate and distribute your annual RMD
• Consider timing within the year: Earlier in the year gives you more time to invest the funds; later in the year gives investment growth more time
• Coordinate with your Social Security and pension income: Understand your total income picture to manage tax brackets
• Explore QCDs if charitably inclined: They’re the most tax-efficient way to satisfy RMDs for charitable donors
• Model Roth conversions before RMDs begin: The years between retirement and RMD start are often the most valuable for conversion strategies

For broader retirement income planning, also see our guides on when to claim Social Security and Medicare Part B and IRMAA surcharges — both interact significantly with RMD timing and amounts.

Key Takeaways

• RMDs are mandatory withdrawals from tax-deferred retirement accounts starting at age 73 (for those born 1951–1959) or 75 (born 1960+)
• The penalty for missing an RMD is 25% of the shortfall (reducible to 10% if corrected within two years)
• RMDs are ordinary income — they can push you into higher tax brackets, trigger IRMAA surcharges, and increase Social Security taxation
• Qualified Charitable Distributions (QCDs) allow you to satisfy RMDs tax-free by donating directly to charity
• Roth conversions before RMDs begin are a powerful strategy for reducing future RMD burden
• Inherited IRAs are now subject to a 10-year distribution rule for most non-spouse beneficiaries