The Government Requires You to Take Money From Your Retirement Account Starting at 73. Here’s Every Rule, Every Mistake, and the $111,000 Strategy Most Retirees Never Use.

WASHINGTON, May 13, 2026 —

Key Takeaways

• A retiree who turned 73 in 2025 must take their first RMD by April 1, 2026 — and their second RMD by December 31, 2026 — meaning two fully taxable distributions land in the same calendar year if the first is delayed to April, a mistake that can cost thousands in unnecessary taxes and Medicare premium increases.
• The RMD amount is calculated by dividing the account’s December 31, 2025 balance by an IRS life expectancy factor — for a 73-year-old, that factor is 26.5, meaning a $500,000 IRA balance generates a 2026 RMD of approximately $18,868.
• The Qualified Charitable Distribution — a direct transfer from an IRA to a charity that counts toward the RMD but does not appear as taxable income — allows retirees aged 70½ and older to give up to $111,000 in 2026, potentially saving thousands in federal taxes, Medicare surcharges, and Social Security taxation simultaneously.

What the RMD Is — and Why the Government Requires It

A Required Minimum Distribution is the IRS’s mechanism for taxing money that has been accumulating in tax-deferred retirement accounts. Traditional IRAs, SEP IRAs, SIMPLE IRAs, traditional 401(k) plans, 403(b) plans, and 457(b) plans all subject their balances to RMD rules. The logic is straightforward: contributions to these accounts were made with pre-tax dollars, and the IRS deferred taxation on both the contributions and the investment growth with the explicit understanding that distributions would eventually occur and be taxed as ordinary income.

SECURE Act 2.0 — signed into law in December 2022 — raised the age at which RMDs must begin from 72 to 73 for individuals born between 1951 and 1959. Individuals born in 1960 or later will not face RMDs until age 75, effective January 1, 2033. Individuals born before 1951 are already taking RMDs under prior rules and their schedule does not change.

Roth IRAs owned by the original account holder are not subject to lifetime RMDs. Roth 401(k) and Roth 403(b) accounts — which previously required RMDs — were also exempted from lifetime RMD requirements under SECURE Act 2.0 effective January 1, 2024. Beneficiaries of Roth accounts are generally subject to the 10-year distribution rule after the account owner’s death.

How to Calculate Your RMD — the Exact Math

The IRS calculates RMDs using a simple formula: divide the account balance as of December 31 of the prior year by the applicable life expectancy factor from the IRS Uniform Lifetime Table.

The RMD percentage of the account balance rises each year as the life expectancy factor decreases. At 73, approximately 3.8% of the prior year-end balance must be withdrawn. By 85, the percentage exceeds 6%. By 90, it approaches 8%. A retiree who delays spending from their IRA and allows the balance to compound does not escape the RMD. They generate larger and larger annual mandatory distributions that become harder to manage from a tax perspective.

If a retiree has multiple traditional IRAs, the RMD is calculated separately for each account — but the total RMD across all IRAs can be taken from any one or any combination of those accounts. If a retiree has multiple 401(k) plans, each plan’s RMD must be taken from that specific plan. 401(k) RMDs cannot be aggregated with IRA RMDs.

The April 1 Trap — The Most Expensive Timing Mistake in Retirement

The first RMD carries a special deadline: April 1 of the year following the year in which the account owner turns 73. This is called the Required Beginning Date. For someone who turned 73 in 2025, the RBD is April 1, 2026.

Every subsequent RMD must be taken by December 31 of the calendar year.

The trap: a retiree who delays their first RMD to April 1 must also take the second RMD by December 31 of the same year. Two RMDs in the same calendar year means two taxable distributions landing on the same tax return — compressing what would have been spread across two tax years into one, potentially pushing the retiree into a higher federal bracket, increasing the taxable portion of their Social Security benefits, and triggering IRMAA surcharges on Medicare premiums for the following year.

The financial penalty of this timing mistake can be substantial. A retiree with a $1,000,000 IRA who delays their first RMD to April 1 takes approximately $37,736 in April and another $39,216 in December — $76,952 in taxable income in a single calendar year. A retiree who takes the first RMD in December of the year they turn 73 takes $37,736 that year and $39,216 the following year — spreading the tax impact across two returns at lower combined income.

Most financial advisors recommend taking the first RMD in the calendar year the account owner turns 73 rather than delaying to April 1 — unless a specific circumstance makes the delay advantageous, such as a year with unusually low income.

The QCD Strategy — $111,000 Tax-Free in 2026

The Qualified Charitable Distribution is one of the most powerful and most underutilized tools in retirement tax planning. Here is what it does:

Any IRA owner aged 70½ or older can direct a transfer of up to $111,000 in 2026 directly from their IRA to a qualified charity. The transfer counts toward satisfying the RMD requirement for the year. It is excluded from taxable income — it does not appear on the tax return as income at all.

The QCD limit is $111,000 for 2026 — up from $108,000 in 2025, indexed annually for inflation. For married couples where both spouses own IRAs, each spouse can make a QCD of up to $111,000 from their respective IRAs, for a combined $222,000.

The tax cascade created by a QCD is the reason financial advisors who specialize in retirement planning regard it as the single most efficient charitable giving vehicle available to retirees over 70½.

The cascade works like this: A retiree with an $80,000 RMD who gives $50,000 via QCD to their preferred charities reports only $30,000 in RMD income on their tax return — not $80,000. That $50,000 reduction in reported income:

• Reduces federal income tax at the retiree’s marginal rate — potentially saving $11,000 or more for retirees in the 22% or higher brackets
• Reduces the IRMAA calculation that sets Medicare Part B and Part D premiums for the following year — potentially saving $1,000 to $3,000 in annual Medicare costs
• Reduces the income threshold calculation that determines what percentage of Social Security benefits are taxable — potentially protecting $25,000 to $42,500 in Social Security income from taxation
• Reduces state income taxes in states that tax retirement income

The QCD is not available from 401(k) plans, 403(b) plans, or other workplace retirement accounts. It applies only to IRAs. Retirees who want to use QCDs should consider rolling 401(k) balances into a traditional IRA to access the QCD strategy.

Sequence of Returns Risk — The Withdrawal Danger Nobody Explains Before You Retire

Sequence of returns risk is the phenomenon that makes the order in which investment returns occur matter enormously when a retiree is withdrawing from their portfolio — a distinction that has no relevance during the accumulation phase but becomes critical during decumulation.

The math is counterintuitive. Two retirees with identical 30-year average annual returns can have dramatically different outcomes if one experiences poor returns early in retirement while the other experiences them late. The retiree who encounters a market downturn in the first five years of retirement depletes a larger share of their portfolio at depressed prices to meet RMDs and living expenses — leaving less capital to recover when markets rebound. The retiree who encounters the same downturn 20 years into retirement has already withdrawn at favorable prices and the remaining portfolio is smaller in absolute terms but represents a smaller share of what was needed.

In 2026, the Iran war’s energy cost shock has compounded sequence of returns risk for recently retired investors. A retiree who retired in late 2025 and began RMDs in January 2026 has been meeting withdrawal obligations during a period of market volatility, elevated inflation, and a Federal Reserve unable to cut rates. Their portfolio is absorbing early-retirement withdrawals at a moment of above-average uncertainty.

The standard mitigation strategies — maintaining 1-2 years of living expenses in cash to avoid selling equities during downturns, using a bucket strategy that separates near-term needs from long-term growth assets, and considering annuity products that provide guaranteed income regardless of market conditions — are most valuable precisely in environments like the current one.

Pro Tips a Generic Article Would Miss

1. The QCD satisfies the RMD obligation from the first dollar transferred — you do not need to take any cash distribution first. One of the most common misunderstandings about QCDs is that the retiree must take the RMD as cash and then donate it to charity. This is incorrect. The QCD is processed as a direct transfer from the IRA custodian to the charity — the retiree never receives the funds and the transfer counts toward the RMD from the moment it is completed. Requesting a check payable to the charity from your IRA custodian — not payable to you — is the standard execution mechanism. The IRS also now allows a one-time QCD of up to $55,000 to a qualifying charitable gift annuity or charitable remainder trust, providing an additional planning option for retirees interested in legacy giving.

2. Roth conversions in the years before RMDs begin — ages 60 to 72 for most current retirees — permanently remove those converted dollars from future RMD calculations and the tax compounding they create. A $200,000 Roth conversion at age 68, growing at 6% annually to age 80, would have been approximately $402,000 in a traditional IRA requiring annual RMDs. In a Roth IRA, the same growth has zero RMD obligation during the owner’s lifetime. The tax paid at conversion is a known, controllable cost. The tax avoided on RMDs from an account that compounds for 12 more years is a significant and recoverable benefit — particularly for retirees whose income in the years between 60 and 72 is lower than it will be once Social Security and pension income begin.

3. If you still work for your current employer at age 73 and own less than 5% of the company, you can delay RMDs from that specific employer’s 401(k) plan until you retire — but this exception does not apply to IRAs or to 401(k) plans from previous employers. The still-working exception is one of the most frequently misunderstood RMD rules. A 74-year-old who is still employed by Company A can delay RMDs from Company A’s 401(k). They cannot delay RMDs from their traditional IRA or from a 401(k) they left at a previous employer. Rolling a prior employer’s 401(k) into the current employer’s plan before age 73 — if the plan accepts incoming rollovers — can extend the still-working exception to those rolled-over dollars and reduce the current-year RMD obligation.

The most valuable action any retiree taking RMDs in 2026 can take is a single calculation: determine the tax impact of taking the RMD as ordinary income versus using a QCD for all or part of it, specifically examining how each approach affects IRMAA Medicare premium calculations for 2028 — which will be based on 2026 income — and the percentage of Social Security benefits subject to taxation. Those two downstream effects are frequently worth more in total tax savings than the federal income tax savings from the QCD alone, and they are almost never quantified by retirees who calculate only the headline income tax deduction.

Frequently Asked Questions

Q: When do required minimum distributions begin in 2026? A: RMDs begin at age 73 for individuals born between 1951 and 1959. Individuals born in 1960 or later will begin RMDs at age 75, effective January 1, 2033. The first RMD must be taken by April 1 of the year following the year the account owner turns 73. All subsequent annual RMDs must be taken by December 31.

Q: How is the RMD amount calculated? A: Divide the account’s December 31 prior year-end balance by the IRS life expectancy factor for your age from the Uniform Lifetime Table. For a 73-year-old, the factor is 26.5. A $500,000 IRA balance generates a 2026 RMD of approximately $18,868. The factor decreases each year, producing a higher required withdrawal percentage as the account owner ages.

Q: What is the penalty for missing an RMD? A: The excise tax for missing an RMD is 25% of the amount not withdrawn. Under SECURE Act 2.0, this is reduced to 10% if the shortfall is corrected within two years. The IRS may also waive the penalty entirely for reasonable cause if the missed RMD is corrected promptly.

Q: What is a Qualified Charitable Distribution and how much can I give in 2026? A: A QCD is a direct transfer from an IRA to a qualified charity that counts toward the RMD but is excluded from taxable income. The 2026 QCD limit is $111,000 per IRA owner. Account owners must be aged 70½ or older. QCDs are available only from IRAs — not from 401(k) plans or other workplace retirement accounts.

Q: Are Roth IRAs subject to required minimum distributions? A: No. Roth IRAs owned by the original account holder are not subject to lifetime RMDs. Under SECURE Act 2.0 effective January 1, 2024, Roth 401(k) and Roth 403(b) accounts are also exempt from RMDs during the original account owner’s lifetime. Beneficiaries of inherited Roth accounts are generally subject to the 10-year distribution rule.