What are RMDs?
Required Minimum Distributions (RMDs) are the minimum amounts you must withdraw annually from your retirement accounts, such as IRAs and 401(k)s, starting at age 73 if you were born between 1951 and 1959. The IRS mandates these withdrawals to ensure that retirement savings are eventually taxed. RMDs begin at age 75 if you were born in 1960 or later.
Required Minimum Distributions – RMD Calculator
To calculate your required minimum distributions, utilize this RMD calculator. Input your age and the end-of-year account balance. The calculator then provides accurate distribution figures tailored to your specifics, streamlining your process.
Calculating Your RMD
- Account Balance: Determine the balance of your retirement account as of December 31 of the previous year.
- Age: Identify your age as of your birthday in the current year.
- RMD Table: Use the IRS Uniform Lifetime Table to find your distribution period, which is based on your age.
Nonqualified annuities purchased with after-tax money are not subject to the retirement-account RMD rules merely because the owner reaches RMD age. Annuities held inside IRAs or other qualified retirement arrangements are subject to the applicable qualified-account RMD rules, and special calculation rules can apply when part of an IRA is used to purchase an annuity.
IRS source: IRS Publication 590-B – special annuity RMD rules
As you are reviewing required minimum distributions basics with an RMD calculator for 2026, retirement annuities for boomers can help coordinate retirement income with RMDs, inflation, future care costs, and legacy goals as retirement gets closer.
IRS source: IRS Publication 590-B – special annuity RMD rules
Retirement Accounts That Have RMDs
- Traditional IRA
- SEP IRA
- SIMPLE IRA
- Traditional 401(k)
- 403(b)
- 457(b) Governmental Plans
- Inherited Traditional IRA
- Inherited SEP IRA
- Inherited SIMPLE IRA
- Inherited 401(k)
- Inherited 403(b)
- Inherited 457(b)
Expert Strategic Note: Nonqualified annuities purchased with after-tax money are not subject to the retirement-account RMD rules merely because the owner reaches RMD age. Annuities held inside IRAs or other qualified retirement arrangements are subject to the applicable qualified-account RMD rules, and special calculation rules can apply when part of an IRA is used to purchase an annuity.
How to Maximize RMDs and Preserve Your Investment Without Risk (Spend Without Worry)
RMD Table (2026)
The IRS publishes life-expectancy tables used to calculate RMDs. The Uniform Lifetime Table below applies to most account owners. The distribution period generally declines with age, which increases the percentage of the prior year-end balance that must be withdrawn. A different table can apply when the account owner’s sole beneficiary is a spouse who is more than 10 years younger.
IRS source: IRS Publication 590-B – Appendix B life expectancy tables
| Age | Distribution Period |
|---|---|
| 73 | 26.5 |
| 74 | 25.5 |
| 75 | 24.6 |
| 76 | 23.7 |
| 77 | 22.9 |
| 78 | 22.0 |
| 79 | 21.1 |
| 80 | 20.2 |
| 81 | 19.4 |
| 82 | 18.5 |
| 83 | 17.7 |
| 84 | 16.8 |
| 85 | 16.0 |
| 86 | 15.2 |
| 87 | 14.4 |
| 88 | 13.7 |
| 89 | 12.9 |
| 90 | 12.2 |
| 91 | 11.5 |
| 92 | 10.8 |
| 93 | 10.1 |
| 94 | 9.5 |
| 95 | 8.9 |
| 96 | 8.4 |
| 97 | 7.8 |
| 98 | 7.3 |
| 99 | 6.8 |
| 100 | 6.4 |
Taxes and Penalties
Tax Implications
The taxable portion of distributions from traditional retirement accounts is generally taxed as ordinary income. A distribution may be partly tax-free when an IRA includes after-tax basis, and a qualifying QCD is excluded from income. Failing to take the full RMD can trigger a 25% excise tax on the shortfall, generally reduced to 10% when the shortfall is corrected within the applicable two-year correction window.
IRS source: IRS RMD guidance – tax and excise-tax rules
Penalties for Missing RMDs
If you do not take the full RMD, the excise tax is generally 25% of the shortfall. It is generally reduced to 10% if the missed amount is withdrawn within the applicable two-year correction window. The IRS can also waive the tax when the shortfall resulted from reasonable error and the taxpayer has taken, or is taking, reasonable steps to correct it; Form 5329 is used to request relief.
IRS source: IRS Publication 590-B – insufficient distributions and waiver relief
Smart Strategies to Minimize the Tax Impact
- Roth Conversions: Reduce future RMDs by converting part of your traditional IRA to a Roth before RMDs start.
- Qualified Charitable Distributions (QCDs): If you are age 70½ or older, an eligible QCD paid directly from an IRA to a qualified charity can count toward your RMD and is generally excluded from gross income. For 2026, the annual QCD exclusion limit is $111,000 per eligible individual.
- Annuities With GLWB Riders: Moving part of an IRA to a fixed or fixed index annuity with a Guaranteed Lifetime Withdrawal Benefit can create contractually guaranteed lifetime income while the IRA remains subject to applicable RMD rules. A level GLWB payment does not automatically protect against inflation; inflation protection requires an increasing-income feature or other contractual adjustment when available.
Understand How RMDs Are Calculated
The RMD amount = Account Balance ÷ IRS Life Expectancy Factor.
The IRS publishes tables (Uniform Lifetime Table, Joint Life Table) to help calculate the exact number.
✔ Pros:
- The required withdrawal percentage generally increases as the IRS life-expectancy factor declines with age. The actual dollar RMD can still rise or fall depending on the prior December 31 account balance.
- You can automate the process with many custodians
IRS source: IRS Publication 590-B – RMD formula
✘ Cons:
- If the market drops but your balance was high on December 31 of the previous year, your RMD doesn’t adjust down.
Who Needs It: Anyone who owns an account that is subject to RMD rules once the applicable starting rules are met. The size of the balance affects the dollar RMD and the importance of tax planning, but a small balance does not eliminate the requirement.
Who Doesn’t: Owners of Roth IRAs and designated Roth accounts do not have lifetime RMDs. However, beneficiaries of Roth and traditional retirement accounts can have post-death distribution requirements regardless of the beneficiary’s own age, so being under RMD age does not by itself mean no RMD is required.
IRS source: IRS RMD FAQs – plans and accounts subject to RMDs
Who Doesn’t:
Those with only Roth IRAs or those under the RMD age.
Helpful Add-on:
Use QLACs (Qualified Longevity Annuity Contracts) to defer up to $210,000 from RMD calculations until age 85.
Managing RMDs with Annuities
Annuities can be an effective tool to manage your RMDs. By purchasing an annuity within your retirement account, you can receive regular payments, simplifying the withdrawal process and ensuring compliance with IRS rules.
An annuity payment does not automatically guarantee that the correct RMD has been satisfied in every situation. Qualified annuity contracts and IRAs with both annuity and non-annuity portions can be subject to special RMD coordination rules, so the required amount should be verified for the specific contract and account structure.
IRS source: IRS Publication 590-B – special rules when IRA assets purchase an annuity
How to Delay RMDs Using a QLAC
If you do not need all your eligible IRA money for near-term expenses, review QLAC eligibility and later-life income. Only qualifying contracts receive special RMD treatment; an ordinary annuity does not erase your RMD obligation. Compare the liquidity cost and future taxable payments with other strategies. Contact The Annuity Expert for free QLAC quotes to review with your tax professional.
How it delays RMDs (simple flow):
- Transfer qualified funds to a QLAC before year-end.
- Dollars inside the QLAC do not count in the year-end balance used to compute next year’s RMDs.
- Start income on your chosen date, no later than age 85; until then, those dollars don’t force RMDs.
Key rules & nuances:
- The $210,000 cap is a lifetime, per-person limit; each spouse with their own accounts has their own cap.
- Works with traditional IRAs and most employer plans; Roth IRAs don’t need QLACs because owners have no lifetime RMDs.
- Funding by December 31 reduces the following year’s RMD base (earlier is better for planning).
- QLAC payouts are ordinary income when they begin; liquidity is limited once funded.
Money-saving tips:
- Pair with Roth conversions: Use a QLAC to shrink current RMDs, then convert some of the remaining IRA in lower-tax years.
- Manage IRMAA exposure: Lower RMD income can help avoid Medicare surcharge brackets in key years.
- Stage funding: You don’t have to use the full cap at once—fund in tranches as your plan evolves.
Who could benefit
- Retirees in their 70s with large traditional IRAs who don’t need every dollar of RMD income and want tighter control of taxable income and IRMAA.
- Singles or widows seeking longevity protection and willing to trade some liquidity for later-life guaranteed income.
Who might not benefit
- Those with modest IRA balances where RMDs are already small, or anyone expecting a much lower tax bracket soon.
- Investors who prioritize full liquidity and market-driven growth over a deferred, guaranteed income stream.
What to Do With RMDs if You Don’t Need the Money
If you don’t rely on your Required Minimum Distributions (RMDs) for living expenses, you can still put them to work:
- Fund Life Insurance: Use RMDs to pay premiums for permanent life insurance. This converts taxable withdrawals into tax-free loans in the future or a death benefit for heirs.
- Buy Annuities With Enhanced Death Benefits: Certain annuities allow you to convert RMDs into income while leaving a larger legacy through increased death benefits (up to a 50% increase on retirement accounts).
- Reinvest in a Taxable Account: Keep your money invested for growth, though gains are taxable.
- Give to Charity: Qualified Charitable Distributions (QCDs) let you send RMDs directly to a charity tax-free.
- Cover Long-Term Care Costs: Apply RMDs toward standalone LTC insurance or hybrid annuity/life policies.
- Gift to Family: Reduce your estate while supporting loved ones today.
Each option helps reduce taxes, transfer wealth, or protect assets.
👉 Contact The Annuity Expert for free quotes on life insurance and annuities with enhanced death benefits to maximize your RMDs.
Final Thought
RMDs aren’t optional—but the tax impact is manageable with the right strategy. Whether you’re optimizing withdrawals, converting to Roth, or layering on guaranteed income with annuities, you can stay ahead of IRS penalties while preserving your retirement.
👉 Book a free call with The Annuity Expert to compare strategies, get quotes, and avoid costly mistakes with your RMDs.
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Questions From Our Readers
Are annuities subject to RMD?
It depends on how the annuity is owned and funded. An annuity held inside a traditional IRA or other qualified retirement arrangement is generally subject to the applicable RMD rules. A nonqualified annuity purchased with after-tax money is not subject to retirement-account RMD rules simply because the owner reaches RMD age. Special RMD calculation rules can apply to qualified annuity contracts, so confirm the required amount for the specific account and contract.
Do RMDs increase with age?
The required withdrawal percentage generally increases with age because the IRS life-expectancy factor declines. The actual dollar RMD does not necessarily increase every year because it also depends on the prior December 31 account balance. If the account value falls enough, the next year’s dollar RMD can be lower even though the withdrawal percentage is higher.
What is the RMD Excise Tax for 2026
If you fail to take the full RMD, the excise tax is generally 25% of the shortfall. It is generally reduced to 10% when the missed amount is corrected within the applicable two-year correction window. The IRS can also waive the tax for reasonable error when corrective steps are taken, and the taxpayer properly requests relief on Form 5329.
What is the IRS life expectancy table?
The account balance is not part of the life-expectancy table itself. The IRS table supplies the applicable distribution period (denominator) based primarily on age and beneficiary circumstances; that factor is then applied to the prior year-end account balance to calculate the RMD.
What are the tax implications of taking an RMD?
The taxable portion of an RMD is generally included in ordinary income. It can affect your federal tax bracket, state income tax, Medicare IRMAA, and the taxation of Social Security benefits. Not every RMD is necessarily 100% taxable—for example, an IRA with after-tax basis can produce a partly tax-free distribution, and a qualifying QCD is excluded from income. There is no 25% federal ordinary-income bracket for 2026; the federal marginal rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%.
How is RMD calculated?
The Uniform Lifetime Table applies to most account owners. If the sole beneficiary is a spouse who is more than 10 years younger, the Joint and Last Survivor Table can apply. Beneficiary RMDs use different rules and may use the Single Life Expectancy Table.
Is it possible to take all required minimum distributions (RMDs) from one account?
Sometimes. You must first calculate the RMD separately for each IRA, but the total IRA RMD can generally be taken from one or more of your IRAs. RMDs for multiple 403(b) accounts can generally be aggregated and taken from one or more 403(b)s. By contrast, RMDs from 401(k)s and most other employer plans generally must be taken separately from each plan. Inherited accounts have additional aggregation restrictions, so do not assume they can be combined with your own IRAs.
I’m 73 and need to start taking money from your IRA; how much tax will I have to pay?
The taxable portion of an RMD is generally subject to federal income tax and may also be subject to state income tax. The actual federal tax cost depends on your total taxable income, deductions, filing status, IRA basis, charitable distributions, and other tax factors. An RMD can also affect Medicare IRMAA and the taxation of Social Security benefits.
Can I take my RMD and reinvest it into something else? Another annuity, perhaps? What is the best option to avoid taxes on income?
Another annuity is an option, and we recommend an annuity that gives you a bonus on those funds (which will help offset the taxes) and then grows tax-deferred. Another option would be to use the RMD funds to fund a Whole Life or Indexed Universal Life policy, which will grow tax-deferred and also provide a tax-free death benefit to your beneficiaries.
When is my RMD due?
For IRAs, your first RMD is for the year you reach the applicable RMD age and may generally be delayed until April 1 of the following year. If you delay it, the second RMD is still due by December 31 of that same year, which can put two taxable RMDs in one calendar year. For many employer plans, the required beginning date can be delayed until retirement if the plan allows it; this still-working exception generally does not apply to a 5% owner of the sponsoring employer.
What is the required minimum distribution on an inherited IRA?
Inherited IRA rules depend on the beneficiary and whether the original owner died before or on/after the owner’s required beginning date. Many non-spouse designated beneficiaries who are not eligible designated beneficiaries must empty the inherited IRA by December 31 of the 10th year after death. If the owner died before the required beginning date and the 10-year rule applies, no annual distribution is required before year 10. If the owner died on or after the required beginning date, annual beneficiary RMDs generally apply during the 10 years in addition to the year-10 depletion deadline. Surviving spouses have additional options, including, in many cases, treating the IRA as their own.