Key Takeaways
- Required minimum distributions from traditional IRAs and pre-tax 401(k) accounts begin at age 73 for individuals born 1951 through 1959, and at age 75 for those born in 1960 or later.
- An RMD equals the prior year-end account balance divided by an IRS life expectancy divisor from the Uniform Lifetime Table. The divisor at age 73 is 26.5. At age 80, it is 20.2.
- Missing an RMD triggers a 25% excise tax on the shortfall under SECURE 2.0, reduced to 10% if corrected within two years.
- Under the SECURE Act, non-spouse beneficiaries who are not eligible designated beneficiaries must fully distribute an inherited IRA by December 31 of the 10th year after the original owner's death.
- Qualified charitable distributions of up to $105,000 per year for 2025 can satisfy the RMD from a traditional IRA without adding to taxable income.
- Roth IRAs are not subject to RMDs during the original owner's lifetime, which is why Roth conversion planning before RMD age is a common tax strategy.
What is a required minimum distribution?
You spent decades building your retirement accounts. At a certain age, federal law starts requiring you to withdraw from them, whether you need the income or not. Those forced withdrawals are called required minimum distributions, or RMDs.
An RMD is the minimum amount you must take out of a traditional IRA, pre-tax 401(k), or similar tax-deferred account each year once you reach the applicable age. Every dollar distributed is taxed as ordinary income. Miss the deadline and the IRS imposes an excise tax on the shortfall. And under the SECURE Act, whatever balance remains at your death may pass to non-spouse heirs under a compressed 10-year distribution window that can push them into higher tax brackets than they would otherwise face.
RMD planning is the work of managing both sides of that equation. Reducing the tax bite on your own required distributions, and structuring what remains so it does not hand your heirs an outsized tax bill.
When do RMDs start?
Under current federal law after the SECURE 2.0 Act, RMDs begin at age 73 or age 75 depending on your year of birth.
| Year of birth | RMD start age |
|---|---|
| 1950 or earlier | Already applies (age 70½ or 72 under prior rules) |
| 1951 through 1959 | 73 |
| 1960 or later | 75 |
The first RMD is generally due by April 1 of the year after you reach your RMD age. Every subsequent RMD is due by December 31. Deferring the first RMD to April 1 of the following year means taking two RMDs in that calendar year, which can push you into a higher bracket and across Medicare IRMAA thresholds.
Roth IRAs are not subject to RMDs during the original owner's lifetime. Designated Roth 401(k) accounts have also been exempt from lifetime RMDs since 2024 under SECURE 2.0.
How much do you have to take?
The RMD for a given year equals your prior December 31 account balance divided by an IRS life expectancy divisor. Most account owners use the Uniform Lifetime Table, which the IRS updated in 2022 to reflect longer life expectancy.
Uniform Lifetime Table (selected ages)
The divisor decreases each year, which means the RMD as a percentage of your balance grows over time. Verify the full table in IRS Publication 590-B.
| Age | Divisor | RMD % of balance | RMD on $1M balance |
|---|---|---|---|
| 73 | 26.5 | 3.77% | $37,736 |
| 75 | 24.6 | 4.07% | $40,650 |
| 78 | 22.0 | 4.55% | $45,455 |
| 80 | 20.2 | 4.95% | $49,505 |
| 85 | 16.0 | 6.25% | $62,500 |
| 90 | 12.2 | 8.20% | $81,967 |
Illustrative RMD amounts based on the IRS Uniform Lifetime Table. Actual RMDs depend on your specific balance.
Worked Example
An account owner age 75 with a $500,000 traditional IRA balance at the prior December 31 divides $500,000 by 24.6, giving an RMD of approximately $20,325 for the year.
Illustrative example only; not a projection or guarantee of any specific outcome.
Aggregation. Traditional IRAs can be aggregated for RMD purposes, meaning you calculate the RMD for each IRA and can withdraw the total from any one or combination of them. Employer plans work differently. Each 401(k), 403(b), or 457(b) requires its own separate RMD taken from that specific plan.
What happens if you miss an RMD?
Missing an RMD triggers a 25% excise tax on the shortfall under SECURE 2.0. Before SECURE 2.0, the penalty was 50%. If the missed distribution is corrected within the correction window, generally two years, the excise tax drops to 10%. Correction involves distributing the missed amount and filing IRS Form 5329 with a statement explaining the shortfall and requesting a waiver.
How are RMDs taxed?
RMDs are taxed as ordinary income at your federal tax rate for the year, plus any applicable state and local tax. Because RMDs increase your modified adjusted gross income, they can also raise Medicare Part B and Part D premiums two years later through Medicare's Income-Related Monthly Adjustment Amount, or IRMAA. Large RMDs can also increase the federally taxable portion of your Social Security benefits.
For a deeper look at IRMAA thresholds and how RMDs interact with them, see our companion IRMAA surcharges guide for Maryland retirees. Verify current IRMAA thresholds with the Social Security Administration.
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Start Your Free Retirement EvaluationThe SECURE Act 10-year rule: what it means for your heirs
Before the SECURE Act, a non-spouse beneficiary who inherited an IRA could stretch distributions across their own life expectancy. This meant an adult child inheriting at age 55 could spread distributions over 30 years or more, keeping annual taxable income relatively low.
The SECURE Act, passed in 2019, changed that. Now, non-spouse beneficiaries who are not eligible designated beneficiaries must fully distribute an inherited IRA by December 31 of the 10th year after the original owner's death. IRS Final Regulations effective 2024 additionally require annual RMDs during years one through nine of the window when the original owner had already reached their required beginning date.
Why This Matters
Consider an adult child, age 55, who inherits a $500,000 traditional IRA from a parent who had already started RMDs. That child must empty the account within 10 years, generating roughly $50,000 or more of additional taxable income each year. If the child is in the middle of their peak earning years, this can push their income into higher federal and state brackets and may also trigger IRMAA-based Medicare premium increases if they are on Medicare.
Illustrative example only; not a projection or guarantee of any specific outcome.
Eligible designated beneficiaries
Certain beneficiaries can continue to use life-expectancy distributions under prior rules. These eligible designated beneficiaries include the surviving spouse, a minor child of the decedent (until age 21, then the 10-year clock starts), a disabled or chronically ill beneficiary, and an individual not more than 10 years younger than the decedent, such as a sibling near the same age.
Surviving spouse options
A surviving spouse who inherits an IRA has more flexibility than any other beneficiary. They can roll the inherited IRA into their own IRA, treat the inherited IRA as their own by re-titling, or remain a named beneficiary. Remaining a beneficiary can be useful for a surviving spouse under age 59½ who may need distributions, because inherited IRA distributions to a spouse are not subject to the 10% early distribution penalty. For further reading on inherited retirement account rules alongside step-up in basis and titling, see our guide to what to do after inheriting assets in Maryland.
Three ways to reduce your RMD tax burden
RMDs are required, but the tax they generate can be managed with three planning levers.
1. Qualified charitable distributions
A qualified charitable distribution, or QCD, is a direct transfer from a traditional IRA to a qualified charity that counts toward the RMD without being included in taxable income. QCDs are available to account owners age 70½ or older and are limited to $105,000 per person for 2025, indexed for inflation.
Worked Example
A retiree age 78 has a $30,000 RMD for the year and gives $20,000 to charity annually. Sending $20,000 directly from the IRA to the charity as a QCD satisfies $20,000 of the RMD. Only the remaining $10,000 of the RMD is added to taxable income. Compared to taking the full $30,000 RMD and separately donating $20,000, the QCD avoids adding $20,000 to adjusted gross income. That reduction can also lower IRMAA-based Medicare premiums two years later and reduce the taxable portion of Social Security benefits.
Illustrative example only; not a projection or guarantee of any specific outcome.
Distributions from 401(k), 403(b), and 457(b) plans do not qualify as QCDs unless first rolled into an IRA. Verify current QCD rules with IRS Publication 590-B.
2. Roth conversions before RMD age
Roth IRAs are not subject to RMDs during the original owner's lifetime. Converting traditional IRA balances to a Roth IRA during the years between retirement and RMD age reduces the traditional balance that would generate RMDs later. Each converted dollar is taxed in the year of conversion but comes out federally income tax-free in future qualified distributions. For a full discussion including bracket sizing and IRMAA planning, see our Roth conversion strategy guide for Maryland residents.
3. Timing coordination with other income
RMDs interact with Social Security taxation and IRMAA thresholds. Bunching deductible expenses in an RMD year, timing large capital gains transactions in non-RMD years, and staying below specific IRMAA cliffs can meaningfully affect the after-tax cost of a distribution stream. Whether any specific strategy applies depends on your full tax picture.
Maryland RMD considerations
For Maryland residents, RMD tax planning involves state-specific factors on top of the federal rules.
Maryland state and county tax. Maryland taxes RMDs as ordinary income at state rates that run up to 6.50% at the top bracket added in 2025, plus county income tax of 2.25% to 3.20% depending on your county of residence. A combined federal, state, and county rate on RMD income can approach or exceed 30% for higher-bracket filers. Verify current rates with the Maryland Comptroller.
Maryland Pension Exclusion Note
Maryland residents age 65 or older, totally disabled, or with a totally disabled spouse may qualify for the Maryland Pension Exclusion, which was $41,200 for the 2025 tax year and $40,600 for the 2026 tax year. The exclusion applies to distributions from qualified employer retirement plans, meaning 401(k), 403(b), 457(b), and defined benefit pension plans. It does not apply to traditional IRA distributions. Rolling a 401(k) into an IRA to simplify RMD administration eliminates Pension Exclusion eligibility on that money going forward. The exclusion is also reduced dollar-for-dollar by Social Security or Railroad Retirement benefits received in the same year.
For a broader picture of Maryland retirement taxation, see our retiring in Maryland tax guide.
Four common RMD planning mistakes
Missing the RMD entirely
The 25% excise tax on the shortfall, reducible to 10% if corrected within the correction window, applies whether the miss was intentional or an oversight. Confirming the current-year distribution has actually been processed is a year-end task worth doing.
Aggregating 401(k) RMDs
Unlike IRAs, employer plans cannot be aggregated. Each 401(k) requires its own RMD from that specific plan. Retirees with an old 401(k) at a former employer sometimes overlook this.
Trying to roll over an RMD
Once you have reached RMD age, the required distribution amount for the year cannot be rolled over to another retirement account. If you take a large distribution intending to return it within the 60-day rollover window, the portion equal to the RMD is excluded from the rollover and remains taxable.
Ignoring the impact on heirs
Under the SECURE Act, a large traditional IRA balance may pass to non-spouse heirs under the 10-year rule, generating substantial taxable income for them during their peak earning years. Roth conversions and QCDs during your lifetime can reduce that future burden.
Plan Your RMDs Around Your Life, Not the Other Way Around
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Sources and Further Reading
The rules discussed in this article come from the following authoritative sources. Figures and rules are subject to change; verify current information before making planning decisions.
- IRS Publication 590-B: Distributions from Individual Retirement Arrangements. Federal rules for required minimum distributions, the Uniform Lifetime Table, and inherited IRA distribution requirements.
- IRS Retirement Topics on Required Minimum Distributions. Current RMD ages following SECURE 2.0 and calculation guidance.
- IRS Form 5329. Reporting form for missed RMDs and the excise tax waiver request.
- Maryland Comptroller: Pension Exclusion. Eligibility rules and current-year exclusion amounts for Maryland residents age 65 and older.
- Social Security Administration: Medicare Premiums and IRMAA. Current IRMAA thresholds and Medicare Part B and Part D surcharges.
- SECURE 2.0 Act of 2022. Statutory text for the SECURE 2.0 provisions that modified RMD ages and the missed-distribution excise tax.
Common Questions
Frequently Asked Questions
01 At what age do RMDs start?
Under current federal law after the SECURE 2.0 Act, required minimum distributions from traditional IRAs and pre-tax 401(k), 403(b), and 457(b) accounts begin at age 73 for individuals born between 1951 and 1959, and at age 75 for individuals born in 1960 or later. Individuals born before 1951 are generally already subject to RMDs under earlier rules. Roth IRAs are not subject to RMDs during the original owner’s lifetime.
02 How is an RMD calculated?
The RMD for a given year equals the prior December 31 account balance divided by an IRS life expectancy divisor. Account owners generally use the Uniform Lifetime Table, updated in 2022. The divisor at age 73 is 26.5; at age 80 it is 20.2. Beneficiaries of inherited accounts generally use the Single Life Expectancy Table instead. Verify current tables in IRS Publication 590-B.
03 What is the penalty for missing an RMD?
Missing an RMD triggers a 25% excise tax on the shortfall under SECURE 2.0, reduced from the previous 50%. If the shortfall is corrected within the correction window, generally two years, the excise tax drops to 10%. Correction involves distributing the missed amount and filing IRS Form 5329 with a statement explaining the shortfall and requesting a waiver.
04 What is the SECURE Act 10-year rule?
Under the SECURE Act of 2019, non-spouse beneficiaries who are not eligible designated beneficiaries must fully distribute an inherited IRA by December 31 of the 10th year after the original owner’s death. IRS Final Regulations effective 2024 also require annual RMDs during years one through nine of the window when the original owner had already reached their required beginning date. Eligible designated beneficiaries, including surviving spouses, minor children of the decedent, disabled or chronically ill individuals, and individuals not more than 10 years younger, are exempt from the 10-year rule.
05 Can a qualified charitable distribution satisfy my RMD?
Yes. A qualified charitable distribution from a traditional IRA counts toward the RMD for the year for account owners age 70½ or older, without the QCD amount being included in taxable income. The 2025 QCD limit is $105,000 per person, indexed for inflation. The distribution must move directly from the IRA custodian to the qualified charity. Distributions from 401(k), 403(b), and 457(b) plans do not qualify as QCDs unless first rolled into an IRA.
06 Can you convert an RMD to a Roth IRA?
No. The RMD amount for a given year cannot be converted to a Roth IRA. Once RMDs have begun, the required distribution must be taken first, and any Roth conversion for that year is on top of the RMD, not in place of it. Additional amounts beyond the RMD can be converted if it fits the household’s planning.
07 Does Maryland tax RMDs?
Yes. Maryland taxes RMDs as ordinary income at state rates up to 6.50% at the top bracket added in 2025, plus county income tax of 2.25% to 3.20% depending on your county. The Maryland Pension Exclusion, $41,200 for 2025 and $40,600 for 2026, may reduce state tax on RMDs from qualified employer plans for account holders age 65 or older, but the exclusion does not apply to RMDs from traditional IRAs.
