Which Accounts Are Subject to RMDs
Not every retirement account triggers RMD obligations, and this is one of the most common sources of confusion. The following account types are subject to RMDs:
- Traditional IRAs (including rollover IRAs)
- SEP IRAs and SIMPLE IRAs
- 401(k), 403(b), and 457(b) plans from former employers
- Most other tax-deferred employer-sponsored retirement plans
Roth IRAs are a notable exception — because contributions are made with after-tax dollars, there is no deferred tax obligation, and the IRS does not require distributions during the original owner's lifetime. This distinction matters significantly for withdrawal planning. See our comparison of Roth and traditional IRA withdrawal strategies for a fuller picture of how each account type affects your income.
If you are still working past age 73 and actively participating in your current employer's 401(k), you may be permitted to delay RMDs from that specific plan until you retire — but this exception does not extend to IRAs or accounts held at former employers.
Still Working Past Age 73?
If you are still employed at age 73 and actively participating in your current employer's retirement plan, you may be able to delay RMDs from that specific plan until you retire. This exception does not apply to IRAs or to retirement accounts held at previous employers. Check with your plan administrator to confirm whether your plan allows this deferral.
How the IRS Calculates Your RMD Amount
Your annual RMD is not a flat percentage. It is recalculated every year using a straightforward formula:
RMD = Prior December 31 Account Balance ÷ IRS Life Expectancy Factor
The life expectancy factor comes from IRS tables — most retirees use the Uniform Lifetime Table (Table III in IRS Publication 590-B). As you age, the divisor decreases, meaning a larger share of your remaining balance must be distributed each year. For example, a 73-year-old uses a factor of approximately 26.5, while an 80-year-old uses approximately 20.2.
If your spouse is the sole beneficiary of your IRA and is more than 10 years younger than you, a different table (the Joint Life and Last Survivor Table) applies and produces a smaller RMD, which may be advantageous.
25%
IRS excise tax on missed RMD amounts
The IRS imposes a 25% excise tax on any RMD shortfall, reduced to 10% if corrected within the defined correction window, per IRS Publication 590-B.
Age 73
Age RMDs begin for most retirees
The SECURE 2.0 Act raised the RMD starting age to 73 for individuals born in 1951 or later, up from the prior threshold of 72.
$105,000
Annual QCD limit from an IRA to charity
As of recent IRS guidance, individuals aged 70½ or older may direct up to $105,000 annually from an IRA to a qualified charity via a Qualified Charitable Distribution, satisfying RMD obligations tax-free.
One practical complication: if you hold multiple traditional IRAs, the IRS allows you to calculate each account's RMD separately, sum them, and then withdraw the total from any one or combination of those IRAs. This aggregation rule does not apply to 401(k) accounts — each employer plan requires its own separate distribution. For a broader look at how RMDs fit into your overall income picture, the retirement income reference guide covers key terms in one place.
Deadlines, Penalties, and the First-Year Exception
The standard deadline for taking your RMD is December 31 of each calendar year. However, the IRS grants a one-time extension for your very first RMD: you have until April 1 of the year following the year you turn 73 to take that initial distribution.
This extension sounds helpful, but it carries a hidden cost. If you delay your first RMD to April 1, you must still take your second RMD by December 31 of that same year — resulting in two taxable distributions in one calendar year. That can push you into a higher tax bracket or increase your Medicare Part B and Part D premiums through a surcharge known as IRMAA (Income-Related Monthly Adjustment Amount).
Consider Taking Your First RMD in December
Although the IRS allows you to defer your very first RMD until April 1 of the following year, doing so means taking two distributions in the same calendar year. To avoid a potential tax bracket jump or Medicare premium surcharge, many financial advisers suggest taking the first RMD by December 31 of the year you turn 73. Consult a tax professional to evaluate what timing makes sense for your situation.
If you miss an RMD or take less than the required amount, the IRS imposes an excise tax of 25% on the shortfall. This penalty drops to 10% if you correct the error within the IRS's defined correction window. The IRS also has a formal correction program for certain plan failures, so acting quickly and consulting a tax professional is advisable if a deadline is missed. RMD income and its tax implications are explored further in our article on why retirees often underestimate taxes on retirement income.
Inherited Accounts and Special Situations
Inherited IRAs operate under a separate set of rules that depend on who you are relative to the original account owner and when you inherited the account. Spouses who inherit an IRA have unique options, including treating the account as their own and applying standard RMD rules based on their own age. Non-spouse beneficiaries generally must deplete inherited accounts within 10 years under rules established by the SECURE Act, though certain eligible designated beneficiaries — such as minor children or disabled individuals — may qualify for longer distribution periods.
Qualified Charitable Distributions (QCDs) are another feature retirees often overlook. Individuals aged 70½ or older can direct up to $105,000 annually (indexed for inflation) from an IRA directly to a qualified charity. A QCD satisfies your RMD obligation for that amount without the withdrawal being counted as taxable income — a meaningful strategy for those who do not need the full distribution for living expenses and who already give to charity.
For retirees assessing the full scope of their income sources and account obligations, the retirement income readiness checklist is a practical starting point. Additional income options beyond Social Security — including annuities and pensions — are outlined in our guide to income sources available to retirees beyond Social Security.
This article provides general financial information for educational purposes only and does not constitute personalized tax, legal, or investment advice. RMD rules are complex and subject to change. Consult a qualified tax professional or financial adviser for guidance specific to your situation.
