Required minimum distributions (RMDs)

Whether you're planning for retirement or already retired, making the most of your savings and avoiding unnecessary penalties is important. Understanding required minimum distribution (RMD) rules can feel confusing, especially when regulations change. Since both RMDs and withdrawal strategies have tax impacts, staying up to date and planning ahead is key.

Key points

• RMDs are the minimum amount you must withdraw from retirement accounts once you reach a certain age (typically 73).
• Most retirement accounts—including traditional IRAs and 401(k) plans—are subject to RMDs.
• Your RMD is calculated based on factors like your account balance, age, and life expectancy factor from IRS tables.
• If you miss your RMD, it could result in a penalty of 25% of the amount you were supposed to withdraw.

What are RMDs?

Starting at age 73,¹ you must withdraw a minimum amount—known as an RMD—each year from tax-deferred retirement savings accounts like traditional IRAs. You may also need to take an RMD from a qualified employer-sponsored plans, such as 401(k) plans.

The IRS sets RMD rules so investors eventually pay taxes on money that's grown tax-deferred in retirement accounts. Keep in mind that while many retirement accounts are subject to RMDs, they don't apply to original owners of certain retirement savings accounts, like Roth IRAs and Roth 401(k)s.

What's the deadline for taking an RMD?

If you're older than 73, you generally need to take your annual RMD by December 31. If you turn 73 anytime this year, even if your birthday has already passed, you have until April 1 of next year to take your first RMD. After that, you must take future RMDs by December 31 each year.

If you choose to wait until April 1 to take your first RMD, you're required to take two RMDs that year—one by April 1 and one by December 31. While this allows you to delay taking your first RMD, it could increase your tax bill for the year in which you make two withdrawals.

Note: For those born on or after January 1, 1960, the RMD age will increase to 75 in 2033.

Which retirement accounts require RMDs?

RMD rules apply to all employer-sponsored retirement plans—such as profit-sharing plans, 401(k) plans, 403(b) plans, and 457(b) plans. They also apply to traditional IRAs, SEP-IRAs, and SIMPLE IRAs.

If you're the original owner of a Roth IRA or Roth 401(k), you don't need to take RMDs on those accounts. However, if you inherit a Roth account, you may have an annual RMD requirement, depending on the final age of the original owner and the number of beneficiaries.

How are RMDs calculated?

Your RMD amount is calculated based on:

• Your age as of December 31 of the current year.
• The balance of your retirement account as of December 31 of the prior year.
• The life expectancy factor using the IRS Uniform Lifetime Table or the IRS Joint and Last Survivor Life Expectancy Table if your spouse is your sole beneficiary and more than 10 years younger.

Example: A 77-year-old with a life expectancy factor of 22.9 and an IRA with a prior-year-end balance of $800,000 would have an RMD of $34,934.50 ($800,000/22.9).

Determining your RMD amount can get complicated, but Vanguard's RMD Estimator allows you to see how much you might have to withdraw each year.

What if I don't take my RMD or withdraw enough?

Missing your RMD, or not taking the full amount, can be costly. If you don't take your full RMD amount by the annual deadline, the IRS charges a penalty tax of 25% of the amount you should've withdrawn. However, if you correct the mistake within two years, the penalty may be reduced to 10%.

Can I take my RMD from multiple retirement accounts?

While you need to calculate your RMD amount on each eligible retirement account you own, you may be able to withdraw the entire amount you owe on all IRAs from one or more of those accounts.

For example, if you calculate your RMD amounts on both your traditional IRA and SEP-IRA, you can withdraw the total amount or a portion of your RMD from one or both accounts. This option is only available if you own multiple IRAs. If you have a 401(k) or other type of retirement plan, you'll need to take your RMDs separately from each of these plan accounts.

Learn how we can help you calculate your RMD

How will my RMDs be taxed and how can I plan for it?

Withdrawals from a traditional IRA are taxed as ordinary income. If you're 59½ or older, your withdrawals are penalty-free. If you funded part of your IRA with after-tax dollars, that portion of your RMD is generally exempt from taxes.

Withdrawals from a Roth IRA or designated Roth account are typically tax- and penalty-free at age 59½, as long as the account has been open for at least five years.

If you're between 59½ and 73, you might benefit from revisiting your tax planning strategy each year. For example, if you have a large tax-deferred retirement account—such as a traditional IRA or 401(k)—and may face high RMDs in the future, you could consider:

• Withdrawing some assets in the years leading up to RMD age. While withdrawing money can increase your taxable income in that year, it may reduce future RMDs because of a smaller account balance.
• Converting some traditional IRA assets to a Roth IRA. Roth IRAs aren't subject to RMDs if you're the original owner. If you've held the account for at least five years, you won't owe any income taxes when you withdraw the assets. Keep in mind that you'll pay ordinary income tax on the converted amount in the year of the conversion, regardless of your age.

A financial or tax advisor can help you understand your specific situation and plan for any taxes you might owe on your RMDs.

What if I don't need the money from my RMD?

RMDs are meant to help you spend your retirement savings—and pay the related taxes—over your lifetime. But if you don't need the money from your RMD for expenses, you might consider these alternatives:

• Reinvesting your RMDs in a taxable account. This allows your money to continue growing, and you can name beneficiaries for that account without passing RMD requirements on to them.
• Gifting to charity. With a qualified charitable distribution (QCD), you can give up to $111,000 in 2026 to eligible charities directly from your IRA. These distributions are excluded from your taxable income and count toward your RMD amount, but can only be made from IRAs—not workplace retirement accounts like 401(k) or 403(b) plans.

You can also use a QCD to fund certain charitable trusts or charitable gift annuities, up to a onetime (lifetime) total of $55,000 for the 2026 tax year.

What else should I consider before taking my RMD?

If it's been a while since you last reviewed your IRA beneficiaries, you may want to update your designations—particularly if you've experienced major life events such as marriage, divorce, births, or deaths. You can review and update your beneficiary information for eligible Vanguard accounts online at any time.

If your only primary beneficiary is your spouse and they're more than 10 years younger, you'll use an IRS life expectancy table that often results in a smaller RMD amount.

Finally, if you're the owner of an inherited IRA, you may still be subject to RMDs—even if you inherited a Roth IRA or Roth 401(k). The RMD rules for inherited IRAs look a little different, and are based on factors like the final age of the original IRA owner and the relationship between the original owner and the beneficiary.

Use Vanguard's Inherited RMD Calculator to learn more and estimate your withdrawal amount.

We're here to help

RMDs can get complicated, but with Vanguard's free RMD Service, we can automatically process your withdrawal each year.

Questions? Connect with one of our investment professionals. Call 888-257-1025 Monday through Friday, 8 a.m. to 8 p.m., Eastern time.