How is the RMD amount calculated?

Your account balance as of December 31 of the prior year, divided by a life expectancy factor from the IRS Uniform Lifetime Table that corresponds to your age. The factor shrinks every year, which means the percentage you're required to withdraw grows as you age, even if your balance stays flat.

What happens if I miss an RMD?

The IRS charges an excise tax on the amount you should have withdrawn but didn't. The penalty was reduced in recent legislation and can drop further if the mistake is corrected within a limited window, but missing an RMD is not a quiet mistake to make twice.

Learn · RMDs

The IRS Makes You Withdraw at 73. Here's the First-Year Number.

It doesn't ask if you need the money. It just sets a minimum, and the minimum grows every year you're alive.

By Retire BFF Editorial Team Updated October 2026

The Worked Example

Tom turns 73 this year. His traditional IRA was worth $600,000 on December 31 last year. The IRS Uniform Lifetime Table gives age 73 a divisor of 26.5. His required minimum distribution for the year is $600,000 ÷ 26.5, which is $22,642. Not $22,000. Not $23,000. The math doesn't round for his convenience, and neither does the tax bill.

Whatever he does with it after that is his business. Spend it, reinvest it in a taxable account, give it away. None of that matters to the IRS. The withdrawal itself is what's required, and it's taxed as ordinary income the moment it leaves the account, whether Tom needed it or not.

Why This Rule Exists at All

Traditional retirement accounts get a deal: money goes in before tax, grows without being taxed along the way, and only gets taxed when it comes out. That's a genuinely good deal. It's also one the government isn't willing to extend forever. RMDs are the point where the IRS says the deferral is over, whether or not you were planning to touch the account.

The age has moved. It was 70½ for a long time. Legislation pushed it to 72, then to 73 for people reaching that age now, with a further increase to 75 scheduled for people born in 1960 or later. Don't assume the number you read here is still accurate in five years. It probably won't be.

Quick Fact The divisor shrinks every year you age, from 26.5 at 73 down toward single digits by your 90s. Your required percentage climbs even if your balance doesn't move at all.

How This Collides With Everything Else on This Site

RMDs are exactly why the low-income window described in the withdrawal order guide matters. Wait until 73 to touch a large traditional IRA and the government decides your withdrawal amount for you, at a size that might push you into a higher bracket than you'd choose on your own. Convert or withdraw some of that balance earlier, during years when your income is naturally low, and the eventual RMD shrinks because the account itself is smaller. That's the whole logic behind a Roth conversion ladder, even for someone who isn't retiring early. It just applies with extra force to an early retiree who has more low-income years to work with.

What Happens If You Miss One

Situation	What happens
RMD missed entirely	Excise tax on the shortfall, reduced in recent years but still real money
Corrected promptly	Penalty can drop further if fixed within a limited window and reported properly

It's a fixable mistake, not a catastrophic one. It's also not one worth testing on purpose.

Watch Out Roth IRAs have never had RMDs for the original owner. Roth 401(k)s used to, until recent legislation removed that requirement starting in 2024. Traditional accounts still require them. Confirm current rules before assuming either way.

RMD FAQ

What age do RMDs start?

73, under current law, for most people reaching that age now. The threshold has moved twice through legislation already, so confirm it hasn't shifted again before planning around it.

How is the amount calculated?

Prior year-end balance, divided by the IRS Uniform Lifetime Table factor for your age. The factor shrinks each year, so the required percentage rises even on a flat balance.

What if I miss one?

An excise tax on the shortfall applies. It's been reduced in recent legislation and can drop further if you correct it promptly, but it's not something to risk twice.

Do Roth accounts have RMDs?

Not Roth IRAs, ever, for the original owner. Roth 401(k)s used to, but that changed starting in 2024. Traditional 401(k)s and IRAs still require them.

Educational purposes only. RMD ages, divisors, and penalty amounts are set by current law and change through legislation. Verify current figures at irs.gov before relying on any number here. This is not personalized tax advice. Retire BFF is not a registered investment advisor.