RMD rules can be confusing, especially due to relatively recent changes made by the Secure 2.0 Act in 2022. Read on to learn about three rules retired workers should know in 2026.<\/p>\n
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Image source: Getty Images.<\/p>\n
1. Required minimum distributions (RMDs) begin at age 73 for account holders born between 1951 and 1959<\/p>\n
The age at which RMDs begin depends on when you were born. The Secure 1.0 Act (2019) raised the starting age from 70 1\/2 to 72 for individuals born on or after July 1, 1949. Then, the Secure 2.0 Act (2022) raised the starting age to 73 for individuals born on or after Jan. 1, 1951.\u00a0The chart below provides a consolidated view of when RMDs begin.<\/p>\n
Account Holder’s Birth Date<\/p>\n
Age When RMDs Begin<\/p>\n
Before July 1, 1949<\/p>\n
70 1\/2<\/p>\n
July 1, 1949, to Dec. 31, 1950<\/p>\n
72<\/p>\n
Jan. 1, 1951, to Dec. 31, 1959<\/p>\n
73<\/p>\n
After Dec. 31, 1959<\/p>\n
75<\/p>\n
Data source: Internal Revenue Service. RMD = required minimum distribution.<\/p>\n
Importantly, RMDs on traditional 401(k) plans<\/a> and traditional IRAs<\/a> (including SEP IRAs<\/a> and SIMPLE IRAs<\/a>) are mandatory at the minimum age shown in the chart above, even if you are still working. In general, RMDs must be completed by Dec. 31, but the first one can be delayed until April 1 of the following year.<\/p>\n Here is an example: Ben turns 73 years old in 2026, so he must start taking RMDs. He is allowed to delay the first withdrawal until April 1, 2027, but the second withdrawal must be taken by Dec. 31, 2027. And all subsequent RMDs must be taken by Dec. 31 of the applicable year.<\/p>\n 2. Account holders with Roth 401(k) plans and Roth 403(b) plans are no longer required to take RMDs<\/p>\n The Secure 2.0 Act eliminated required minimum distributions on Roth 401(k) plans<\/a> and Roth 401(b) plans<\/a>. Prior to that legislation,\u00a0there was a discrepancy in that Roth IRAs<\/a> were not subject to RMDs, while Roth 401(k) plans and Roth 403(b) plans were subject to RMDs.<\/p>\n To be clear, RMD rules no longer apply to dedicated Roth accounts while the original account holder is alive, but they do apply to Roth IRAs and Roth 401(k) plans once\u00a0the account is inherited by a beneficiary<\/a>.<\/p>\n 3. Account holders will be penalized for failing to take RMDs before the deadline<\/p>\n RMDs are calculated by dividing the account balance from Dec. 31 (in the prior year) by a life expectancy factor found in one of three tables published by the IRS. Returning to my previous example, Ben (who turns 73 in 2026) will calculate his 2026 RMD by dividing his account balance as of Dec. 31, 2025, by the life expectancy factor listed on the applicable IRS table.<\/p>\n In most cases, the account holder will use Table III (Uniform Lifetime), and beneficiaries will use Table I (Single Life Expectancy) to determine the withdrawal amount. However, the account holder will use Table II (Joint and Last Survivor Life Expectancy) if their spouse is both their sole designated beneficiary and more than 10 years younger.<\/p>\n Historically, account holders who failed to complete their RMD on time were penalized with a 50% excise tax, meaning they owed the IRS 50% of the amount not withdrawn. The Secure 2.0 Act lowered the excise tax penalty to 25%,\u00a0and a further reduction to 10% is possible if the account holder corrects the error within two years. Account holders who fail to take their RMD on time must file a Form 5329<\/a> with their tax return.<\/p>\n","protected":false},"excerpt":{"rendered":"Retirees with tax-deferred accounts should know the ins and outs of required minimum distributions (RMDs). Retirement accounts such…\n","protected":false},"author":2,"featured_media":385585,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,147,530],"class_list":{"0":"post-385584","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-personal-finance","10":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/385584","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=385584"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/385584\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/385585"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=385584"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=385584"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=385584"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}