You spent decades doing the right thing — maxing out the 401(k), never touching the IRA, watching the balance grow and telling yourself you’d deal with the taxes later. Later is here. Once you turn 73, the IRS wants its share, whether you need the money that year or not.

For a lot of Central Illinois retirees, the first required minimum distribution notice feels like a letter from a stranger. It shows up with a number attached, a deadline attached, and no explanation of how that number got calculated or what it means for next April’s tax bill. And underneath the paperwork is a real worry: am I about to get pushed into a higher tax bracket, or lose part of my Medicare savings, because of money I didn’t even choose to take out?

This guide walks through how RMDs actually work — the age rules, the calculation, the penalties, and the moves that keep a mandatory withdrawal from quietly costing you more than it has to — so you can see the whole picture before your first one is due.

Advisor note: “An RMD isn’t a decision you get to make. But almost everything around it is — which account it comes from, when in the year you take it, whether it goes to you or straight to a charity. That’s where the planning actually happens.”

When do I have to start taking RMDs?

Your RMD age depends on your birth year: 73 if you were born between 1951 and 1959, and 75 if you were born in 1960 or later. Your first RMD is due by December 31 of the year you reach that age — though you can delay the very first one until April 1 of the following year.

That delay sounds like a gift, and in one sense it is. But it comes with a catch worth understanding before you use it: if you push your first RMD into the following spring, you’ll owe two RMDs in that calendar year — the delayed one and the one for the new year. Two taxable withdrawals landing in the same tax year can push you into a higher bracket, trigger a Medicare surcharge, or both. For most people, taking the first RMD by December 31 of the actual RMD year, rather than delaying it, keeps the tax picture cleaner.

A quick note on Roth accounts. Roth IRAs don’t have RMDs during your lifetime — you can leave that money growing tax-free for as long as you want. Roth 401(k) balances used to be the exception, but current rules have removed lifetime RMDs from those too. Traditional IRAs, traditional 401(k)s, 403(b)s, SEP IRAs, and SIMPLE IRAs are the accounts this whole guide is really about.

If you were born… Your RMD age is… Your first RMD is due by…
1950 or earlier 72 (or 70½, depending on year turned 70½) Already required
1951–1959 73 Dec. 31 of the year you turn 73 (or April 1 the following year)
1960 or later 75 Dec. 31 of the year you turn 75 (or April 1 the following year)
How is my RMD actually calculated?

Your RMD is your retirement account balance as of December 31 of the prior year, divided by a life-expectancy factor the IRS publishes in the Uniform Lifetime Table. Most people use that table; if your spouse is more than 10 years younger and is your sole beneficiary, a different table applies and generally produces a smaller required withdrawal.

Say your IRA held $500,000 at the end of last year and your factor is 25.3. Divide the two and your RMD for this year is roughly $19,763. That’s the minimum — you can always take more. If you have several traditional IRAs, you can calculate each one’s RMD separately and then withdraw the total from any single IRA, or split it across them. 401(k)s work differently: each one’s RMD generally has to come out of that specific account, though the “still working” exception may let you delay RMDs from a current employer’s plan if you’re not a 5% owner of the business.

Which balance to use, in plain terms:

IRA: the December 31 balance from last year, across all your traditional IRAs if you want to aggregate them.
401(k) or 403(b): the December 31 balance from last year, in that specific plan — these generally don’t aggregate with each other or with IRAs.
Inherited account: different rules entirely (more below), and usually a shorter runway than your own accounts.
What happens if I miss an RMD, or take too little?

Missing an RMD, or shorting it, triggers an IRS penalty of 25% of the amount you should have withdrawn — a real number, not a rounding error. If you catch the mistake and correct it within two years, that penalty drops to 10%. Either way, it’s an expensive way to learn a deadline. If it happens, the fix generally involves taking the missed amount as soon as you catch it and filing IRS Form 5329 to request a penalty waiver for reasonable cause — a conversation worth having with a CPA rather than handling alone.

The more common way people get tripped up isn’t forgetting entirely. It’s underestimating: an old 401(k) from a job they left fifteen years ago, a small IRA nobody’s looked at since a rollover, an inherited account with its own separate deadline. Each account needs its own RMD calculated and either taken separately or (for IRAs) aggregated correctly. This is exactly the kind of thing that falls through the cracks when nobody’s looking at the whole picture at once.

Why can an RMD raise my taxes even if I don’t “need” the money?

An RMD counts as ordinary taxable income the moment it leaves the account, regardless of whether you spend it, reinvest it, or move it to a savings account the same afternoon. For many retirees, RMDs stack on top of Social Security, pension income, and investment income — and that combined total is what can push you into a higher tax bracket or trigger a Medicare surcharge you didn’t see coming.

That surcharge has a name: IRMAA, the Income-Related Monthly Adjustment Amount. It applies once your modified adjusted gross income crosses set thresholds, and Medicare calculates it using your tax return from two years earlier — so a big RMD, a Roth conversion, or a large capital gain this year can raise your Medicare premiums two years from now, at a point when your income may have already dropped back down.

Filing status 2026 IRMAA threshold (based on 2024 income)
Single Above $109,000 MAGI
Married filing jointly Above $218,000 MAGI

IRMAA works like a cliff, not a slope — cross a threshold by even a small amount and you pay the full surcharge for that tier on both Medicare Part B and Part D, not just on the income above the line. That’s part of why RMD planning is best done a few years ahead of your RMD age, not the week the first notice arrives.

What are my options for managing the tax hit?

A few tools show up again and again for retirees trying to keep an RMD from doing more damage than it has to:

Qualified Charitable Distributions (QCDs). Starting at age 70½, you can send up to a set annual amount directly from your IRA to a qualified charity. A QCD counts toward your RMD but never shows up as taxable income — it goes straight to the charity, not through your tax return first. For retirees who give regularly anyway, this is often the simplest fix available.

Roth conversions before RMD age. Moving money from a traditional IRA to a Roth IRA in the years before your RMDs begin means paying tax on that amount now, at today’s rate, in exchange for a smaller traditional balance (and smaller future RMDs) later. This only makes sense with a real projection of your future tax bracket — it’s not a move to make on a hunch.

Timing withdrawals across a multi-year window. Rather than treating RMD age as a switch that flips on, some retirees start taking voluntary withdrawals earlier, in lower-income years, to smooth out the tax picture before RMDs become mandatory.

Coordinating with Social Security timing. Because RMDs, Social Security, and Medicare premiums are all connected through your tax return, the year you claim Social Security and the year your RMDs begin interact in ways that are easy to miss when each is planned in isolation.

Simplify if… / Preserve if…
Your situation Worth exploring
You give to charity most years anyway A QCD to satisfy some or all of your RMD
Several old 401(k)s and IRAs, never consolidated Simplifying into fewer accounts before RMD age, so nothing gets missed
You expect to be in a similar or higher bracket later Roth conversions in the years before RMDs begin
You’re close to an IRMAA threshold A projection of MAGI across the next two tax years, not just this one
You haven’t claimed Social Security yet Coordinating that decision with your RMD start date, not planning them separately
What if I inherited an IRA or 401(k)?

Inherited retirement accounts follow a different clock, and it’s one of the more misunderstood corners of RMD rules. For most non-spouse beneficiaries who inherited after 2019, the account generally has to be fully distributed within 10 years of the original owner’s death — and depending on whether the original owner had already started their own RMDs, annual withdrawals may be required during those 10 years, not just a lump sum at the end. Spouses, minor children, disabled or chronically ill beneficiaries, and beneficiaries not much younger than the original owner have different options, including in some cases stretching distributions over their own life expectancy.

This is one of the easiest places for a family to make an expensive mistake, usually by treating the inherited account like an ordinary IRA and missing an annual distribution requirement buried in the 10-year rule. If you’ve inherited a retirement account in the last few years, it’s worth confirming which rules actually apply to your situation before assuming you have a full decade before anything is due.

Simplify. Preserve. Thrive. — bringing it together

An RMD, on its own, is just a number on a form. What it means for your family depends on everything around it — which account it comes from, what else is happening on your tax return that year, whether Medicare premiums are in the mix, and where the money goes once it’s out.

Simplify starts with knowing what you actually have: every old 401(k), every IRA, every account with its own RMD clock, looked at together instead of one notice at a time. Preserve is the tax-aware part — using QCDs, Roth conversions, and timing to keep an IRS-mandated withdrawal from also becoming an unplanned tax-bracket jump or Medicare surcharge. And Thrive is the longer view: how RMDs, and the accounts behind them, eventually pass to the people who come after you, and whether the plan you’re following today sets that up well or leaves it for someone else to untangle later.

None of that happens by accident. It happens when someone’s actually watching the whole thing.

Mistakes to avoid
Waiting until the notice arrives. RMD planning works best two or three years before your RMD age, not the month the first one is due.
Forgetting an old account. A 401(k) from a job you left years ago still has its own RMD once you’re of age — it doesn’t disappear because you stopped thinking about it.
Taking the “delay to April” option without checking the math. Delaying your first RMD often means two taxable RMDs in one year, which can do more harm than good.
Ignoring the two-year IRMAA lookback. A large RMD or Roth conversion this year can raise your Medicare premium two years from now, after your income has already changed.
Treating an inherited IRA like your own. The 10-year rule and its annual distribution requirements catch a lot of families off guard.
Not coordinating RMDs with Social Security and pension timing. Planned separately, each decision can look fine. Planned together, they often tell a different story.
Frequently Asked Questions about RMDs

Do Roth IRAs have RMDs?
No. Roth IRAs have no required minimum distributions during the original owner’s lifetime, which is one reason they’re often used for money you want to leave growing as long as possible.

What’s the penalty for missing an RMD?
The IRS penalty is 25% of the amount that should have been withdrawn, reduced to 10% if you correct the mistake within two years.

Can I take my RMD from just one account if I have several IRAs?
Yes, for traditional IRAs. You can calculate each IRA’s RMD separately, then withdraw the combined total from any one of them or split it across them. 401(k)s generally don’t work this way — each plan’s RMD typically has to come from that specific account.

Does a QCD count toward my RMD?
Yes. A Qualified Charitable Distribution sent directly from your IRA to a qualified charity counts toward satisfying your RMD, and the amount isn’t included in your taxable income.

How does an RMD affect my Medicare premium?
An RMD adds to your modified adjusted gross income, and if that pushes you over an IRMAA threshold, you’ll pay a higher Medicare Part B and Part D premium — based on a two-year lookback, so the effect shows up later, not immediately.

What if I’m still working past my RMD age?
If you’re still working and not a 5% owner of the company sponsoring your 401(k), you may be able to delay RMDs from that current employer’s plan. This exception doesn’t apply to IRAs or to 401(k)s from previous employers.

Do I have to take an RMD the same year I inherit an account?
It depends on your relationship to the original owner and whether they’d already started their own RMDs. Inherited-account rules are different enough from your own RMD rules that they’re worth confirming individually rather than assuming.

Can I reinvest my RMD if I don’t need the cash?
Yes — once it’s withdrawn and taxed, you can reinvest it in a taxable brokerage account, use it for a QCD if it hasn’t already left the IRA, or apply it toward other goals. You just can’t put it back into the tax-deferred account it came from.