At 73, a $500,000 IRA must pay out $18,867.92: the RMD arithmetic
The IRS rules on required minimum distributions: the start age under SECURE 2.0, the April 1 trap, the divisor table and the 25% excise tax.
- What happened
- Under the IRS's general rule, owners of traditional IRAs and workplace retirement accounts must start withdrawals at age 73, with the starting age moving to 75 for people born on or after January 1, 1960. The withdrawal is the prior December 31 balance divided by an IRS factor: 26.5 at age 73, which makes the 2026 minimum on a $500,000 IRA $18,867.92.
- Why
- Tax-deferred money cannot stay deferred forever. The IRS divisor shrinks with each year of age, so the share of the account that must come out rises: 3.77% of the balance at 73, 4.95% at 80.
- The numbers that matter
- 73General RMD starting age (75 if born on or after Jan 1, 1960)26.5Uniform Lifetime Table distribution period at age 7325%Excise tax on an RMD shortfall; 10% if corrected within two years2024First year designated Roth 401(k) accounts are exempt during the owner's life
- Why it matters
- Each required withdrawal from a traditional account counts as income in the year it is taken. Missing one costs a quarter of the shortfall before any correction.
- What happens nextas we saw it on 7 Oct 2026
- Owners already taking RMDs must take their 2026 amount by December 31, 2026. Under the IRS rule, people who turned 73 in 2026 can delay their first one to April 1, 2027, but then owe a second one by December 31, 2027.
The same balance requires a withdrawal 31% larger at age 80 than at 73, because the IRS divisor falls from 26.5 to 20.2.
| Age 73 (÷ 26.5) | 18868 |
|---|---|
| Age 75 (÷ 24.6) | 20325 |
| Age 77 (÷ 22.9) | 21834 |
| Age 80 (÷ 20.2) | 24752 |
Take a traditional IRA worth $500,000 on December 31, 2025, owned by someone who turns 73 in 2026. The tax code says $18,867.92 of it must come out for 2026. It is not a rule of thumb. It is the balance divided by 26.5, a number printed in an IRS table, and missing it carries an excise tax of 25% of whatever was not withdrawn.
Required minimum distributions, or RMDs, end tax deferral. Money that went into a traditional IRA or 401(k) untaxed has to start coming out, and being taxed, at a set age. Every rule below comes from IRS pages: its RMD FAQs, Publication 590-B, and the regulations and notices it publishes.
The starting age: 73, then 75
The IRS RMD FAQs (last reviewed January 29, 2026) state: “You generally must start taking withdrawals from your traditional IRA, SEP IRA, SIMPLE IRA, and retirement plan accounts when you reach age 73.” The IRS retirement topics page on RMDs (last reviewed August 4, 2026) uses the same age.
The age has moved more than once, and the law that sets it is written in terms of when a person reaches an age, not when they were born. The IRS restated the statute in Notice 2026-13, dated January 15, 2026.
In the case of an individual who attains age 72 after December 31, 2022, and age 73 before January 1, 2033, the applicable age is 73 … in the case of an individual who attains age 74 after December 31, 2032, the applicable age is 75.IRS Notice 2026-13, Safe Harbor Explanations – Eligible Rollover Distributions, January 15, 2026
The final RMD regulations, T.D. 10001, printed in Internal Revenue Bulletin 2024-33 on August 12, 2024, translate that into birth dates.
| Date of birth | Applicable age |
|---|---|
| Before July 1, 1949 | 70½ |
| July 1, 1949, to December 31, 1950 | 72 |
| January 1, 1951, but before January 1, 1959 | 73 |
| On or after January 1, 1960 | 75 |
Someone born in 1959 reaches 72 in 2031 and 73 in 2032, which fits the age-73 wording quoted above (72 after December 31, 2022; 73 before January 1, 2033). The same person reaches 74 in 2033, which also fits the age-75 wording (74 after December 31, 2032). Both clauses apply to the 1959 cohort. The birth-date list in T.D. 10001 runs from “before January 1, 1959” to “on or after January 1, 1960”, leaving that year out.
People born in 1960 reach 75 in 2035.
The April 1 deadline and the two-withdrawal year
The IRS FAQs: “You must take your first required minimum distribution for the year in which you reach age 73. However, you can delay taking the first RMD until April 1 of the following year. If you reach age 73 in 2024, you must take your first RMD by April 1, 2025, and the second RMD by Dec. 31, 2025.”
That delay is the trap. Every later RMD is due by December 31 of its own year. Pushing the first one into the following calendar year puts two withdrawals into one year. The IRS retirement topics page says that taking the first withdrawal by December 31 of the year you turn 73, instead, would “allow the distributions to be included in your income in separate tax years.”
Owner turns 73 in 2026 and delays. First RMD (for 2026): $500,000 ÷ 26.5 = $18,867.92, due by April 1, 2027. Second RMD (for 2027, age 74): assume the December 31, 2026 balance is also $500,000; $500,000 ÷ 25.5 = $19,607.84, due by December 31, 2027. Total withdrawn in calendar 2027: $38,475.76. The level balance is an illustrative assumption. A real balance on December 31, 2026 would reflect a year of returns and still include the undrawn first RMD.
Workplace plans have one extra wrinkle. The IRS's topics page gives their required beginning date as “April 1 following the later of the calendar year in which you: reach age 73, or retire (if your plan allows you to delay taking your RMD until retirement).” IRAs have no such exception.
The divisor table
The IRS FAQs: “A RMD is calculated for each account by dividing the prior December 31 balance of that IRA or retirement plan account by a life expectancy factor that the IRS publishes in Tables.” The Uniform Lifetime Table applies when the owner's spouse is not the sole beneficiary or is not more than 10 years younger. A spouse who is the sole beneficiary and more than 10 years younger moves the owner to the Joint and Last Survivor Table.
| Age in distribution year | Distribution period | RMD on $500,000 | Share of balance |
|---|---|---|---|
| 73 | 26.5 | $18,867.92 | 3.77% |
| 74 | 25.5 | $19,607.84 | 3.92% |
| 75 | 24.6 | $20,325.20 | 4.07% |
| 76 | 23.7 | $21,097.05 | 4.22% |
| 77 | 22.9 | $21,834.06 | 4.37% |
| 78 | 22.0 | $22,727.27 | 4.55% |
| 79 | 21.1 | $23,696.68 | 4.74% |
| 80 | 20.2 | $24,752.48 | 4.95% |
Prior December 31 balance $500,000. At 73: $500,000 ÷ 26.5 = $18,867.92. At 75: $500,000 ÷ 24.6 = $20,325.20. At 80: $500,000 ÷ 20.2 = $24,752.48. The share of the balance is 1 ÷ the factor: 3.77%, 4.07% and 4.95%. The age-80 amount is 31.2% above the age-73 amount ($24,752.48 ÷ $18,867.92 = 1.312).
Publication 590-B does the same arithmetic in its own example. An owner who turns 75 in 2026 with a $100,000 balance at the end of 2025 owes “$4,065 ($100,000 ÷ 24.6).” Each year the inputs change twice: the balance is reset to the new December 31 figure, and the owner moves one row down the table.
The IRS FAQs: “An IRA owner must calculate the RMD separately for each IRA they own but can withdraw the total amount from one or more of the IRAs.” By contrast, RMDs from plans “such as 401(k) and 457(b) plans, must be taken separately from each of those plan accounts.” The FAQs also confirm that an owner can withdraw more than the minimum.
The penalty, and the cheaper way out
The IRS FAQs: “If an account owner fails to withdraw the full amount of the RMD by the due date, the amount not withdrawn may be subject to an excise tax of 25%, 10% if the RMD is timely corrected within two years.” The tax is reported on Form 5329, and the FAQs say it may be waived if the shortfall was “due to reasonable error” and reasonable steps are being taken to remedy it.
The IRS final regulations cite section 4974(a) “as amended by section 302(a) of the SECURE 2.0 Act” for the 25% rate, and set the 10% rate for a shortfall corrected within a “correction window”. They define the correction window precisely. It closes on the earliest of three dates: when a notice of deficiency for the tax is mailed, when the tax is assessed, or “the last day of the second taxable year that begins after the end of the taxable year in which the tax … is imposed.”
Shortfall: the full $18,867.92. At 25%: $18,867.92 × 0.25 = $4,716.98. If corrected within the window: $18,867.92 × 0.10 = $1,886.79. Either amount is on top of the ordinary income tax due when the money is eventually withdrawn.
Where Roth money fits
Publication 590-B (2025): “If you are the original owner of a Roth IRA, you don't have to take distributions regardless of your age.” For designated Roth accounts inside 401(k) and 403(b) plans, the IRS final regulations explain that section 325 of the SECURE 2.0 Act provides that the lifetime minimum distribution rules “do not apply to a designated Roth account,” and that the change “applies to taxable years beginning after December 31, 2023.” The IRS retirement topics page states: “You're not required to take withdrawals from Roth IRAs, or from Designated Roth accounts in a 401(k) or 403(b) plan while the account owner is alive.”
The IRS page “Retirement topics – Designated Roth account”, marked as last reviewed August 1, 2026, still says: “Designated Roth accounts are subject to the required minimum distribution rules that apply to 401(k), 403(b) and governmental 457(b) plans,” and gives a starting age of 72. That contradicts the regulations and the IRS's RMD pages cited above.
Where IRS pages disagree, the regulations and the statute they cite carry more weight than a general explainer page. The page date shows when a page was last reviewed. It does not show that every sentence on it was updated.
Heirs are a separate matter. The IRS FAQs note that RMD rules “do apply to the beneficiaries of Roth IRA and Designated Roth accounts.” For owners who die after December 31, 2019, the general rule is that the entire account must be distributed within ten years, with exceptions for a surviving spouse, a minor child, a disabled or chronically ill person, and a person not more than ten years younger than the owner.
What it means for your money
An RMD is a floor on withdrawals, not an instruction to spend. What the rule fixes is the timing of the tax. Each dollar withdrawn from a traditional account is added to income in the year it is taken. So the two-withdrawal year described above can add $38,475.76 of income to a single tax return instead of spreading it over two.
The rising share is also worth seeing plainly. At 73 the minimum is 3.77% of the balance and at 80 it is 4.95%, so the required floor rises each year whatever the account earns. Readers who think about withdrawals as a rate may find our piece on the four percent rule a useful comparison. Whether the account shrinks depends on returns, which no table sets. The compounding that built the balance keeps working on whatever is left. To see how a withdrawal rate interacts with a savings target, the freedom number calculator runs the arithmetic.
Sources
- Retirement plan and IRA required minimum distributions FAQs (page last reviewed Jan. 29, 2026)Internal Revenue Service · Oct 4, 2026 · Primary source
- Retirement topics – Required minimum distributions (RMDs) (page last reviewed Aug. 4, 2026)Internal Revenue Service · Oct 4, 2026 · Primary source
- Publication 590-B (2025), Distributions from Individual Retirement Arrangements (IRAs)Internal Revenue Service · Oct 4, 2026 · Primary source
- Notice 2022-6: Determination of Substantially Equal Periodic Payments, Appendix A (Uniform Lifetime Table)Internal Revenue Service · Oct 4, 2026 · Primary source
- Internal Revenue Bulletin 2024-33 (Aug. 12, 2024): T.D. 10001, Required Minimum DistributionsInternal Revenue Service · Oct 4, 2026 · Primary source
- Notice 2026-13: Safe Harbor Explanations – Eligible Rollover Distributions (Jan. 15, 2026)Internal Revenue Service · Oct 4, 2026 · Primary source
- RMD comparison chart (IRAs vs. defined contribution plans) (page last reviewed Dec. 10, 2025)Internal Revenue Service · Oct 4, 2026 · Primary source
- Retirement topics – Designated Roth account (page last reviewed Aug. 1, 2026)Internal Revenue Service · Oct 4, 2026 · Primary source
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