Key takeaways
- Your required minimum distribution is the prior 31 December balance divided by one number from the IRS Uniform Lifetime Table. At 73 that divisor is 26.5, or 3.77% of the balance.
- The divisor falls every year, so the required fraction climbs: 3.77% at 73, 6.25% at 85 and 8.20% at 90 — roughly 2.2 times the starting rate.
- The starting age is 73 for anyone born from 1951 to 1958 and 75 for anyone born from 1960. For a 1959 birth the statute says both, and Treasury's answer is still a proposal.
- Deferring the first distribution to 1 April stacks two into one tax year. Crossing the $109,000 Medicare line adds $95.70 a month in surcharges, on a cliff with no taper.
- Missing a distribution costs 25% of the shortfall under section 4974, or 10% if corrected inside the window. Before 2023 the rate was 50%.
The whole calculation is one division, and here it is
You're coming up on 73, there's money in a traditional IRA or an old workplace plan, and you want two answers. How much do you have to take out? And what does it cost if you don't?
Here's the arithmetic in full. Take the account balance as it stood on 31 December of the previous year. Divide it by a single number from a table the IRS prints in Publication 590-B. That's your required minimum distribution for the year. The IRS calls that number the applicable denominator. Most people call it the divisor.
At 73 the divisor is 26.5. So the distribution is 3.77% of the balance — $9,434 on $250,000, $37,736 on $1,000,000. Your spending, your other income and what the money is invested in don't enter the calculation anywhere. It's the balance and the divisor, and nothing else.
The IRS works the same sum in its own publication: "Your required minimum distribution for 2026 would be $4,065 ($100,000 ÷ 24.6)." That's a 75-year-old, and 24.6 is the divisor at 75.
Two things make this harder than one division. The starting age has moved twice since 2019 and now depends on the year you were born. And the first year carries a deadline that can drop two distributions into one tax year, which is where most of the avoidable cost sits.
The starting age is 73 or 75, and your birth year decides which
The SECURE Act of 2019 moved the trigger from 70½ to 72. SECURE 2.0, enacted on 29 December 2022, moved it again. Treasury's final regulations of July 2024 set out the ladder by date of birth.
- Born before 1 July 1949: the applicable age is 70½.
- Born on or after 1 July 1949 but before 1 January 1951: 72.
- Born from 1 January 1951 through the end of 1958: 73.
- Born on or after 1 January 1960: 75.
You'll notice 1959 is missing. That isn't a typo. Section 107 of SECURE 2.0 sets the applicable age at 73 for anyone who attains 72 after 31 December 2022 and 73 before 1 January 2033, and at 75 for anyone who attains 74 after 31 December 2032. A person born in 1959 satisfies both descriptions.
Treasury said as much in plain words. The section "includes an ambiguity relating to the definition of applicable age for employees born in 1959", so the final rule reserved the paragraph and a proposed rule filled it: age 73. As at August 2026 no later distribution rule has appeared in the Federal Register, so for a 1959 birth the operative text is a proposal rather than a finished regulation.
One more branch. If you're still working and the money sits in your current employer's plan, you can generally wait until the year you retire — unless you're a 5% owner of the business. An IRA gets no such extension, and neither does a plan you left behind at a previous job.
The divisor falls every year, so the required percentage climbs
This is what a single number at 73 hides. The divisor isn't fixed. It drops each year you live, so the fraction of the balance you have to take rises. Slowly at first, then not slowly.
| Age | Divisor | Share of balance | On $250,000 | On $1,000,000 |
|---|---|---|---|---|
| 73 | 26.5 | 3.77% | $9,434 | $37,736 |
| 75 | 24.6 | 4.07% | $10,163 | $40,650 |
| 80 | 20.2 | 4.95% | $12,376 | $49,505 |
| 85 | 16.0 | 6.25% | $15,625 | $62,500 |
| 90 | 12.2 | 8.20% | $20,492 | $81,967 |
| 95 | 8.9 | 11.24% | $28,090 | $112,360 |
| 100 | 6.4 | 15.63% | $39,063 | $156,250 |
The chart above plots the middle column of that table. Read it as a floor under your withdrawals rather than a plan: 3.77% at 73, 6.25% at 85, 8.20% at 90. Between those first and last figures the required fraction rises by roughly 2.2 times.
Two things follow. The arithmetic is linear in the balance, so the table scales to whatever you hold — halve the balance and you halve the distribution. And at 73 the required 3.77% sits below the starting rates in most of the withdrawal-rate research, which is why the rule binds on hardly anyone early. Our guide to safe withdrawal rates in international data puts those starting rates side by side. By 90, at 8.20%, the position has reversed.
The table also holds the balance still, which no real account does. A portfolio that keeps growing pushes the dollar figure up faster than the percentage column suggests, because a rising fraction gets applied to a rising base.
One caveat on which table you use. Table III, the Uniform Lifetime Table, is the default. If your spouse is the sole beneficiary and is more than 10 years younger than you, you use Table II instead and the divisor is larger. The IRS's own example: a 75-year-old with a 64-year-old spouse as sole beneficiary divides by 25.3 rather than 24.6, so the distribution on $100,000 is $3,953 rather than $4,065.
The first-year deadline is the one that costs money
Your first distribution is for the year you reach the applicable age, but you can delay taking it until 1 April of the following year. Every distribution after that is due by 31 December.
Take the delay and you get the consequence the IRS spells out itself: "For the first year following the year you reach age 73, you will generally have two required distribution dates: a withdrawal on April 1 of the year following the year you turn 73 and an additional withdrawal by December 31."
Hold a $1,000,000 balance flat to isolate the effect. The distribution at 73 is $37,736 and the one at 74 is $39,216. Take the first one on time and each year carries one. Defer it and one year carries $76,952 while the other carries nothing.
Whether that's expensive depends on where the rest of your return sits relative to two lines. Neither line is a slope. Both are steps.
The first is the tax band. For an unmarried filer in the 2026 tax year, the 22% band ends at $105,700 of taxable income and the 24% band starts there. The standard deduction is $16,100, plus $2,050 if you're unmarried and have attained age 65, so $18,150 in total. If the doubled-up year pushes $37,736 across that edge, the extra federal tax is $755 — 2% of the amount that moved.
The second is Medicare, and it's harsher, because it's a cliff rather than a taper. The standard Part B premium for 2026 is $202.90 a month. Modified adjusted gross income above $109,000 for a single filer, or $218,000 filing jointly, adds $81.20 a month to Part B and $14.50 to Part D. That's $95.70 a month, about $1,148 across 12 months, and crossing the line by $1 triggers the whole step.
The surcharge also runs on a lag. Social Security's rules use "your modified adjusted gross income provided by IRS for the tax year 2 years prior", so an income spike in 2027 sets the 2029 premium, at whatever the thresholds are by then. CMS puts the share of Part B enrollees paying any surcharge at roughly 8%, so this hits a minority. A doubled-up distribution year is exactly the kind of event that moves someone into that minority for a year.
Now the other side, because "never defer your first distribution" is a rule of thumb and rules of thumb have exceptions. If you retire during the year you turn 73, that year may still carry most of a salary while the next one carries almost none. Shifting $37,736 out of the high-income year and into the low-income year can beat splitting the two evenly. The deferral is a tool. It turns into a trap when it's taken by default, because the default case is two ordinary retirement years, and stacking two distributions into one of them raises the marginal rate on the second.
IRAs pool, 401(k) accounts don't, and that's where shortfalls happen
The distribution is computed account by account in every case. What differs is whether you can then satisfy the total from wherever you like.
With IRAs you can. The IRS: "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." The same permission runs within 403(b) contracts, which pool with each other.
With workplace plans you can't. "RMDs required from other types of retirement plans, such as 401(k) and 457(b) plans, must be taken separately from each of those plan accounts." Three IRAs and one withdrawal is compliant. Two old 401(k) accounts and one withdrawal is not, and the shortfall sits on the account you didn't touch however large the total was.
The pools don't cross either. An IRA distribution doesn't satisfy a 403(b) obligation. If you've collected accounts across a career, the number of separate obligations is the thing to establish before December, and it's the reason the split between plan types matters here more than it does in an ordinary year. Our guide to what a 401(k) and an IRA are each better at covers the rest of that split.
A related trap sits next to it. A required distribution isn't eligible for rollover. Consolidating accounts in a year you owe one means the required amount has to come out first, because rolling the whole balance over doesn't discharge it.
The penalty is 25% of the shortfall, and 10% if you fix it in time
Section 4974 imposes "a tax equal to 25 percent of the amount by which such minimum required distribution exceeds the actual amount distributed during the taxable year". It's an excise tax on what you failed to take, and it sits on top of the income tax you owe once you do take it.
On the $37,736 example, missing the distribution entirely costs $9,434.
There are two ways down from there. The first is the correction window. Take the missed amount out of the same plan and file a return reflecting the tax inside the window, and the statute substitutes "10 percent" for "25 percent" — $3,774 instead of $9,434. The window ends on the earliest of a notice of deficiency, an assessment, or "the last day of the second taxable year that begins after the end of the taxable year in which the tax ... is imposed". That is roughly two years, which is why the IRS summarises the whole thing as "25%, 10% if the RMD is timely corrected within two years".
The second way down is a waiver, and it goes to nothing. The tax "may be waived if the account owner establishes that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall". That's Form 5329 with a letter of explanation attached to it. Two conditions, and both are needed: the error was reasonable, and it's being put right.
It's worth knowing how new all of this is. Before SECURE 2.0 the rate was 50%. Public Law 117-328 "substituted '25 percent' for '50 percent'" for taxable years beginning after 29 December 2022. The same missed distribution would have cost $18,868. Any guidance written before 2023 that quotes 50% is describing a rate that no longer exists.
The case that this is a smaller problem than it sounds
The strongest objection to treating any of this as a cost is that a required distribution isn't one. It's a timing rule. The tax was always owed on that money; the account only deferred it. Being made to recognise the income in 2026 rather than 2036 changes when you pay, and possibly the rate, but it confiscates nothing. Nor does anything require you to spend the proceeds — the same investments can sit in a taxable account the following day. Whether retirees spend enough of what they have is a separate question, and the evidence on underspending in retirement suggests the forced withdrawal is rarely what pushes anyone into overspending.
There's also a route that keeps the income off the return altogether. A qualified charitable distribution goes straight from the IRA trustee to the charity, counts towards the required minimum, and stays out of gross income. The 2026 exclusion limit is $111,000 and you have to be at least 70½. For someone who gives anyway, that's the obligation discharged with money that never appears as income — which also keeps it out of the modified-AGI figure the Medicare surcharge reads.
Set against that, the evidence suggests the more common failure isn't a bad decision at all. It's not knowing the rule applies. EBRI's Spending in Retirement Survey, fielded in the summer of 2022 across nearly 2,000 American retirees aged 62 to 75, found that among those aged 72 and over with tax-deferred savings, 31% said they weren't taking a required distribution or weren't sure. The same question had returned 49% in 2020.
Treat that carefully. It's self-reported, it's a survey sample rather than a compliance audit, and some of those retirees may genuinely have owed nothing — a Roth account, or a plan they were still working under. But 31% is not a rounding error. And the objection and the evidence end up pointing the same way: if the distribution is only a timing rule, then the entire cost of getting it wrong is the penalty and the bracket, which is exactly why the mechanics above deserve more attention than the philosophy.
What these rules don't settle
Everything above is federal. State income tax on retirement distributions varies from state to state and none of it is covered here.
The dollar thresholds are 2026 figures and most of them move every year. The tax bands, the standard deduction, the surcharge steps and the charitable limit are all indexed. The divisors aren't indexed at all — they come from mortality tables in the regulations, and they've been unchanged since 2022.
The answer for a 1959 birth is a proposal, not a final rule. The Uniform Lifetime Table covers the default case only: a much younger spouse as sole beneficiary changes the table, and an inherited account runs on a separate regime with its own 10-year clock that none of this addresses. Publication 590-B in its current edition is written for preparing 2025 returns, though the worked examples in it are stated for the 2026 distribution year.
What would change the answer
If the 1959 proposal is finalised differently, everyone born in that year moves their first required distribution by two years. The proposed answer is 73. The statute, read literally, also says 75.
If Congress moves the age again, the ladder gains another rung. One is already scheduled: 75 for anyone born from 1960, which first applies to distributions for 2035. Two changes since 2019 is not a stable rule, and the direction has been one way.
If the mortality tables are revised, every percentage in the table above moves with them. The divisors aren't a law of nature. They're an administrative estimate of life expectancy, and Treasury rewrites them periodically.
If the money is in a Roth, none of this applies while you're alive. Roth IRAs and designated Roth accounts in a 401(k) or 403(b) carry no lifetime distribution requirement. That's the one structural exit from the whole apparatus, and it gets decided years earlier, at the point of contribution or conversion.
The thing to check before December isn't the divisor. It's the count: how many separate accounts owe a distribution this year, and whether each one has actually been touched. LedgerTouch keeps every account's balance in one place, which is the input to that count. The excise tax is charged per shortfall, not per person.