Taxes
Required minimum distributions (RMDs)
When required minimum distributions start, how to calculate them with the IRS table, the first-year timing trap, and ways to plan around them, including charitable distributions.
Education, not advice. This guide explains general rules with invented examples. It isn't financial, tax or legal advice for your situation. Tax figures are for 2026 and come from published IRS, SSA and CMS sources. Rules change, so check current figures before you act.
Traditional IRAs, 401(k)s and similar pre-tax accounts let your savings grow without tax for decades. Eventually the IRS wants its share. From a certain age, you must withdraw at least a minimum amount each year and pay income tax on it. That's a required minimum distribution, or RMD.
RMDs matter for planning because they're not optional. A large traditional balance can force taxable income into your 70s and 80s whether you need the money or not.
When RMDs start
Your starting age depends on when you were born:
| Born | RMDs start at age |
|---|---|
| 1951 through 1958 | 73 |
| 1959 | 73 (based on proposed regulations) |
| 1960 or later | 75 |
The rule for people born in 1959 is unsettled. The law's wording could be read as 73 or 75. Proposed IRS regulations say 73. Check for final rules before you rely on it.
Roth IRAs have no required distributions during the owner's lifetime.
How the amount is calculated
The RMD for a year is your account balance on December 31 of the previous year, divided by a life expectancy factor from the IRS Uniform Lifetime Table. Each account is measured separately, though you can total your IRA RMDs and take them from any of your IRAs.
| Age | Divisor | RMD as a share of the balance |
|---|---|---|
| 73 | 26.5 | 3.8% |
| 75 | 24.6 | 4.1% |
| 80 | 20.2 | 5.0% |
| 85 | 16 | 6.3% |
| 90 | 12.2 | 8.2% |
The share rises each year. By your late 80s, required withdrawals can outpace what the account earns, so the balance tends to shrink.
If your spouse is more than 10 years younger and is the sole beneficiary, a different IRS table applies and gives a smaller RMD. The app uses the Uniform Lifetime Table.
A worked example
Helen was born in 1953 and turns 73 in 2026. Her traditional IRA was worth $800,000 on December 31 of last year.
Her 2026 RMD is $800,000 ÷ 26.5 = $30,189.
That's taxable income. If she's single and already has $40,000 of pension income and $30,000 of Social Security, the RMD falls largely in the 22% bracket.
Compare Helen's neighbor Frank, born in 1960 with the same $800,000. His RMDs won't start until 75. At that age the divisor is 24.6, so the same balance would require $32,520. The extra years give him more time to convert or spend down the account at lower rates.
The first-year timing trap
You can delay your first RMD until April 1 of the year after you reach the starting age. Every later RMD is due by December 31.
If Helen delays her first RMD to March 2027, she must also take her second RMD by December 2027. Two RMDs in one tax year can push her into a higher bracket and raise Medicare premiums two years later. Taking the first one in the year she turns 73 usually avoids the bunching.
Ways to plan around RMDs
Withdraw or convert before they start
The years between retiring and your RMD age are often your lowest-income years. Drawing on traditional accounts then, or converting some to Roth, lowers the balance that RMDs are calculated on. See Roth conversions and withdrawal order.
Give to charity directly from your IRA
From age 70.5, you can send money directly from an IRA to a qualifying charity. This qualified charitable distribution (QCD) counts toward your RMD but isn't included in your income. In 2026 you can give up to $111,000 this way.
A QCD can be worth more than a deduction, because most retirees take the standard deduction and get no tax benefit from itemized gifts. Keeping the gift out of income can also help with Medicare premiums and the taxation of Social Security.
Keep working, if your plan allows it
If you're still working and don't own 5% or more of the company, many employer plans let you delay RMDs from that plan until you retire. This doesn't apply to IRAs. The app doesn't model this exception, so a plan with a working spouse past the RMD age may show distributions earlier than you'd take them.
Take them as a monthly paycheck
There's no need to take the whole RMD in December. Many people set up monthly or quarterly withdrawals, with tax withheld, to replace a paycheck.
Missing an RMD
Missing an RMD triggers an IRS excise tax on the amount you should have taken. The tax is lower if you correct the mistake promptly. Most custodians will calculate and send RMDs automatically if you ask.
How the app handles RMDs
Each December of the projection, the app works out every traditional account's RMD from the prior year-end balance and the IRS table, using each owner's birth year for the starting age. Withdrawals you've already taken from an account that year count toward its RMD, and so do qualified charitable distributions.
Inherited IRAs follow their own rules. The app models the payout rules for inherited IRAs you already own. See estate basics for what heirs receive.
Frequently asked questions
Can I reinvest an RMD?
Yes, but not in a tax-advantaged account. You can reinvest it in a taxable brokerage account. You can't roll it into a Roth or another IRA.
Do RMDs apply to my 401(k) and my IRA separately?
Yes. Each employer plan's RMD must come from that plan. IRA RMDs can be totaled and taken from any of your IRAs.
Does a Roth conversion count as my RMD?
No. You must take the RMD first. You can convert additional money after that.