It makes sense that you'd want to leave your retirement savings in your account as long as you can. This gives your investments more time to grow and avoids unnecessary withdrawals that just inflate your tax bill. But once you turn 73, the choice about when to withdraw your savings is no longer all your own.
The IRS requires that you take required minimum distributions (RMDs) annually from most tax-deferred retirement accounts, including traditional IRAs and 401(k)s, and charges steep penalties for those who skip them. Here's what you need to know if you haven't taken your 2025 RMD yet.
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If you turned 73 in 2025
Generally, you must take RMDs by Dec. 31 of the year in question, but your first year is an exception. If you turned 73 in 2025, you have until April 1, 2026 to take your first RMD.
The first step in calculating yours is to determine your account balances as of Dec. 31, 2024. (You may need to check with your plan administrator for this information.)
Next, divide this amount by the distribution period next to your age, as of Dec. 31, 2025, in the Uniform Lifetime Table. For those who turned 73 in 2025, that would be 26.5. The result is your 2025 RMD.
For example, if you have $100,000 in a traditional IRA, you would divide $100,000 by 26.5 to get an RMD of about $3,774. This is the minimum you must withdraw to avoid the IRS tax penalty, though you're free to withdraw more if you like.
Keep in mind that if you haven't taken your 2025 RMD yet, you will have to take two RMDs in 2026. You'll have to complete your 2026 RMD by Dec. 31.
If you turned 74 or older in 2025
Those who turned 74 or older last year and haven't completed their 2025 RMDs will face a penalty for failing to do so by Dec. 31, 2025. This penalty is 25% of the RMD not taken, but you can reduce this to 10% if you correct the issue within two years.
You'll need to take your 2025 RMD, which you can calculate using the process described in the previous section and file Form 5329 with your 2025 tax return.
In some cases, the IRS may waive the penalty altogether if you can prove that your failure to take your RMD on time was due to reasonable error and you're taking steps to address the problem. You'll get a chance to include a letter of explanation on Form 5329.
If you have any questions about how your RMD will affect your tax bill, it's best to speak with an accountant who can give you personalized advice. But act quickly. Tax professionals are especially busy this time of year.
