What are Required Minimum Distributions?
- Malik Polly
- 2 days ago
- 3 min read
February 9, 2026
Required minimum distributions (RMD) are the minimum amounts you must withdraw annually from select retirement accounts, such as traditional IRAs, 401(k)s and other employer sponsored plans. RMDs were created to prevent taxpayers from using these tax-advantaged retirement accounts as a permanent tax shelter.
Example: A taxpayer contributes to a traditional IRA during their lifetime, which reduces their taxable income each year of their contribution.
The taxpayer will only be taxed on those funds once they begin to take funds out of the traditional IRA account.
If that taxpayer never withdrew funds from the traditional IRA account, they could have passed it onto their heirs as a tax-free asset.
When are RMDs required?
Generally, you must begin taking RMDs on April 1st of your 73rd birthday (if born after 1959).
No, this is not an April Fool’s joke.
After you have received your first RMD, the following distributions will be due on December 31st until your account is emptied.
How much do I need to distribute?
Your RMD will depend on two factors:
total value of your eligible retirement accounts as of December 31st of the prior year
life expectancy factor (these factors are provided by the IRS Publication 590-B)
RMD = Prior Year Account balance at the end of the year / Life expectancy factor
What are the penalties for non-compliance with RMDs?
The taxpayer may be assessed a penalty of 25% of the RMD that was not distributed.
Inherited IRAs - Do I need to make RMDs?
Yes, if you receive an inherited a retirement plan (after 12-31-2019) you will need to begin taking RMDs over a 10-year period until the account is empty.
There are a few exceptions to this rule, such as being:
Surviving spouse
Child of the IRA owner (minority, under the age 21 under SECURE rules)
Chronically Ill or Disabled Individual
Furthermore, if an estate inherits a retirement account from an individual that had not reached their RMD age, then the estate would begin to take RMDs over a 5-year period.
If the deceased reached the age of RMD, then the estate would begin taking RMDs over a 10-year period.
Inherited IRAs – I did not make any RMDs, what do I do?
The IRS has granted relief to taxpayers that have not made any RMDs for the periods 2021, 2022, 2023 or 2024 for inherited retirement accounts. (1)
The relief does not force taxpayers to accelerate their RMDs to catch up for the missed distributions, instead the taxpayer will need to recognize the difference in year 10 for the remaining funds in the account.
Example: A taxpayer has inherited a $100K traditional IRA account on 1-15-2020.
The taxpayer did not make any RMDs for 2021, 2022, 2023 or 2024.
The taxpayer would need to make the following RMDs at the minimum:
2021 $0
2022 $0
2023 $0
2024 $0
2025 $10,000
2026 $10,000
2027 $10,000
2028 $10,000
2029 $10,000
2030 $50,000
OBBBA’s extended lower tax brackets and new senior deduction also create additional planning opportunities to reduce future RMDs through well‑timed Roth conversions and the use of qualified charitable distributions (QCDs).
Consult a Tax Professional
Understanding RMDs are crucial for tax planning purposes. It impacts financial planning, asset management, and estate planning. Please consult your tax advisor to build a plan for your future RMDs.
Footnote:
(1) IRS Notice 2024-35