What Is an RMD?

A required minimum distribution is the smallest amount you are legally required to withdraw from certain retirement accounts each year once you hit the required age. The logic is straightforward: accounts like a traditional IRA or 401(k) let you defer income tax for decades while the balance grows, and RMD rules exist so that the government eventually collects the tax that was postponed. You can always take out more than the minimum; the RMD is just the floor, and whatever you withdraw is generally taxed as ordinary income.

The deadline matters too. Your first RMD can generally be delayed until April 1 of the year after you reach the required age, but every RMD after that is due by December 31 of each year. Delaying that first one can stack two taxable withdrawals into a single year, which is why many people take the first RMD in the year they turn the required age rather than waiting. The specifics depend on your birth year and account type, so verify the deadlines with the IRS.

The age RMDs begin has moved over time. The SECURE 2.0 Act raised the required beginning age from 72 to 73 starting in 2023, and it will raise it again to 75 starting in 2033. In practical terms for 2026: if you were born between 1951 and 1959, your RMDs begin at age 73; if you were born in 1960 or later, they begin at age 75. This is a meaningful change because it gives many people a few extra years of tax-deferred growth before withdrawals are forced.

Because the age depends on your birth year and is scheduled to shift again, it is worth confirming exactly when your RMDs start rather than relying on an old rule of thumb. The previous ages of 70 and a half and then 72 are still floating around in older articles. Treat 73 (and 75 from 2033) as the current SECURE 2.0 framework, and verify your specific start year with the IRS or a tax professional.

RMDs apply to tax-deferred accounts, the ones where you got an upfront tax break. That includes traditional IRAs, SEP IRAs, and SIMPLE IRAs, plus employer plans like 401(k), 403(b), and most governmental 457(b) plans. The common thread is that the money went in pre-tax (or tax-deductible) and has not been taxed yet, so the IRS uses RMDs to start collecting.

The big exception is Roth accounts, which were funded with money that was already taxed. A Roth IRA has no RMDs at all while the original owner is alive. And a notable recent change: starting in tax year 2024, Roth 401(k)s no longer require RMDs for the owner either, which removed a quirk that used to push people to roll a Roth 401(k) into a Roth IRA just to avoid distributions. Inherited accounts, both traditional and Roth, can carry their own distribution rules, so check current IRS guidance if you have inherited one.

The basic formula is simple. You take the account balance as of December 31 of the prior year and divide it by a life-expectancy factor published by the IRS. Most account owners use the Uniform Lifetime Table; a separate table applies if your sole beneficiary is a spouse more than ten years younger. As you age, the life-expectancy factor gets smaller, so the same balance produces a larger required withdrawal each year, expressed as a rising percentage of the account.

If you hold several accounts, the rules differ by type. RMDs from multiple IRAs can generally be totaled and taken from any one of them, while each employer plan like a 401(k) usually must satisfy its own RMD separately. Plan providers and the IRS both publish RMD calculators, but because the tables and rules are updated, confirm the exact figure with the IRS or a tax professional before you withdraw.

Missing an RMD used to be one of the harshest penalties in the tax code, at 50% of the amount you failed to withdraw. SECURE 2.0 cut that sharply. The penalty is now a 25% excise tax on the shortfall, and it drops to 10% if you correct the mistake within a two-year window by taking the missed distribution and filing the right form. It is still a penalty worth avoiding, but the reduced rate and the correction window give people a path to fix an honest oversight.

Because the correction process and timing are specific, this is a good place to be careful rather than to guess. If you think you missed an RMD, the steps to claim the reduced penalty or request a waiver are detailed, so verify the current procedure with the IRS or work with a tax professional.

One strategy people use to manage RMDs is the qualified charitable distribution, or QCD. If you are age 70 and a half or older, you can direct money straight from your IRA to a qualified charity. The amount can count toward your RMD for the year and is generally excluded from your taxable income, which can be more tax-efficient than taking the RMD as income and then donating it separately. The QCD limit is indexed for inflation and is $111,000 for 2026.

A QCD only works under specific conditions: the funds must go directly from the IRA custodian to an eligible charity, and the eligible-charity and account-type rules matter. It is a real planning tool, but the details determine whether it applies to you. Walnut is not a tax advisor, so confirm eligibility, timing, and the current limit with the IRS or a qualified professional before relying on it.

The pattern is consistent: tax-deferred accounts have RMDs, and Roth accounts generally do not. Rules, ages, tables, and limits are current as of 2026 under SECURE 2.0 and are subject to change, including the scheduled jump to age 75 in 2033. Always verify the details that apply to you with the IRS. For background on the underlying account types, see our what is an IRA and Roth IRA explained guides.

RMDs are a tax question, and Walnut is not a tax advisor, so the calculation and timing belong with the IRS or a professional. But the investments inside your retirement accounts are something you can look at more closely. The useful questions are practical: what do I actually hold across my IRA and 401(k), how is each position doing against the broad market, and how concentrated or diversified is the account as a whole.

That is where Walnut fits. It connects your existing brokerage through SnapTrade and lets you ask, in plain language through Claude, ChatGPT, or a built-in assistant, what is in your retirement accounts and how each holding is performing. It is read-only by default, and you approve any trade. Walnut is informational and is not a financial or tax advisor; it helps you see and act on your own portfolio, not decide your RMD or tax strategy.

An RMD is the mandatory annual withdrawal you must take from tax-deferred retirement accounts once you reach the required age, so the IRS can finally tax money that grew untaxed for decades. Under SECURE 2.0 that age is 73 for people born between 1951 and 1959 (the 2026 rule) and rises to 75 for those born in 1960 or later. Traditional IRAs, 401(k)s, 403(b)s, and SEP IRAs require them; Roth IRAs do not, and Roth 401(k)s stopped requiring them in 2024. The amount comes from the IRS life-expectancy tables, the penalty for missing one is now 25% (10% if corrected in time), and QCDs offer a charitable way to satisfy an RMD.

The specifics depend on your birth year, account types, and personal situation, and the rules change. Treat this page as a starting point, confirm anything that affects you with the IRS or a tax professional, and keep your retirement investments in view in the meantime. Walnut is informational and is not a financial or tax advisor; this is not tax advice.