Are you going to be 73 years old -- or older -- at any point in 2026? If so, and if you've got any money in a tax-deferring retirement account that isn't a Roth, then congratulations! Whether or not you need it or want it, you're required to make a taxable withdrawal from it this year. They're called required minimum distributions, or RMDs.
But what's the minimum? It's a percentage of the account's value as of the last business day of last year (your broker or custodian should be able to supply you with this information). But the percentage isn't the same for everyone. The older you are, the more you must remove; the IRS offers worksheets to help determine your particular required withdrawal.
For perspective, here's the required withdrawal on $462,410 worth of retirement savings held in a tax-advantaged account at a range of ages. Notice that the number not only grows with age, but that the rate of the RMD's growth accelerates as the age inches higher.
- 73: $17,449.43 (3.77%)
- 75: $19,797.15 (4.06%)
- 80: $22,891.58 (4.95%)
- 85: $28,900.63 (6.25%)
- 90: $37,902.46 (8.20%)
The amount of the required minimum inches progressively higher with age, mostly because the IRS wants to make sure it collects all the tax income it's due that's otherwise been postponed during your lifetime.
There's no RMD with Roth IRAs, of course, since withdrawals from them aren't taxable.
Details, details
There are some other considerations here. First, with the exception of your very first RMD (for the year in which you turn 73), the deadline to make the withdrawal is the end of the calendar year. However, you can wait until April 1 of the following year to take your first one. Just keep in mind that doing so will mean two sizable distributions in the same tax year, possibly pushing you into a higher tax bracket.
Second, remember that while there's a minimum, you can remove more than this amount if you want. Just bear in mind that doing so will also up your tax liability for that year.
Image source: Getty Images.
Third, you don't necessarily need to withdraw cash. You can take what's called an in-kind distribution of assets. That just means transferring existing stakes in stocks, bonds, or funds out of the retirement account and into a traditional brokerage account. Your broker or IRA's custodian can give you a specific value for this distribution as of the day it happens.
And lastly, there's no rule that says you must take your RMD all at once. If it suits you better, you can stagger these withdrawals over the course of the year. The IRS only cares that you take the minimum out before the deadline. Otherwise you risk what can be a fairly steep penalty.
The amount of $462,410 wasn't pulled out of a hat, by the way. That's the average value of retirement accounts owned by U.S. residents aged 75 and up the last time the Federal Reserve performed a survey of consumers' finances back in 2022.
