Tax-deferred retirement accounts are a deal: no tax now, tax later. Required minimum distributions are the later. Beginning at a specified age, a calculated amount must come out each year and be included in income, whether or not you need it — the deferral was never permanent.
For someone with substantial tax-deferred balances and other income, these forced withdrawals can push them into a higher bracket and trigger income-linked costs elsewhere.
This is general information, not tax advice. Ages, factors, and rules change; confirm current requirements with a professional.
What changed in 2026
- Starting ages shifted upward. Legislation moved the beginning age later, which extended the pre-distribution planning window for people approaching it.
- Designated Roth workplace accounts lost the lifetime requirement. Aligning them with individual Roth accounts removed a long-standing quirk that forced unnecessary rollovers.
- The penalty for a missed distribution was reduced. Still meaningful, with an additional reduction for prompt correction.
- Inherited account rules stayed complex. The ten-year framework for many beneficiaries, with annual distribution requirements in some cases, continued to generate confusion.
How the calculation works
| Element |
Detail |
| Balance used |
Account value at the end of the prior year |
| Divisor |
A life expectancy factor from published tables |
| Result |
The minimum that must be withdrawn that year |
| Deadline |
Generally year-end, with an extension for the first year |
| Aggregation |
Individual accounts may be aggregated; workplace plans generally not |
| Tax treatment |
Ordinary income in the year withdrawn |
The aggregation distinction catches people with several accounts. Individual retirement accounts can typically be aggregated — calculate the total requirement and take it from whichever accounts you prefer. Workplace plans generally must each satisfy their own requirement separately.
The first-year extension is a trap as much as a convenience. Deferring the first distribution into the following year means taking two in one tax year, which can produce exactly the bracket problem you were trying to avoid.
The planning window
The years between retiring and distributions beginning are the most valuable planning period most people have. Income is often lower — employment has ended, distributions have not started — which means a temporarily lower tax bracket.
That window is when Roth conversions are most efficient. Moving money from tax-deferred to Roth means paying tax now at a lower rate, reducing the balance that will generate forced distributions later, and creating a pool with no lifetime distribution requirement. The mechanics are in Roth conversion ladder.
Qualified charitable distributions are the other significant tool once you are old enough to use them. Sending a distribution directly to a charity satisfies the requirement without the amount entering your income, which is better than taking it and donating, since it avoids the income-linked effects entirely — covered in qualified charitable distributions.
Watch the second-order effects. Distributions raise adjusted gross income, which can increase the taxable portion of other benefits and raise income-linked premiums. The bracket is not the only cost.
Common mistakes
- Deferring the first distribution without checking. Two in one year can cost more than it saves.
- Assuming all accounts aggregate. Workplace plans generally do not.
- Wasting the pre-distribution window. The lowest-bracket years for conversions.
- Donating after taking a distribution. Direct transfer to charity is usually better.
- Ignoring income-linked effects. Premiums and benefit taxation move with income.
- Forgetting inherited account requirements. Different rules, easily missed.
FAQ
What if I am still working?
Some workplace plans allow deferring distributions from that employer's plan while employed, if you are not a substantial owner. It does not extend to other accounts.
Do Roth accounts require distributions?
Individual Roth accounts have no lifetime requirement, and designated Roth workplace accounts no longer do either. Inherited Roth accounts have their own rules.
What happens if I miss one?
A penalty applies to the shortfall, reduced from historical levels, with further reduction for prompt correction. Correct it quickly and file the required form.
How do inherited accounts work?
Many non-spouse beneficiaries must empty the account within ten years, with annual distributions required in some circumstances. The rules are detailed enough to warrant professional input.
Where to go next
For the conversion strategy, read Roth conversion ladder. For charitable distributions, qualified charitable distributions, and for the contribution side, super catch-up contributions.