Here’s a hypothetical that plays out in some version constantly, so let’s make it concrete: imagine a 75-year-old with $340,000 in an IRA who types “RMD penalty” into a search bar one evening in March and lands on a page — impossible to say which one — that says missing a required withdrawal costs half of whatever didn’t get taken out. Half. On $340,000, that’s the kind of number that ruins your whole week, and it’s a mild panic worth taking seriously if it happened to you or someone you’re helping.
The good news: a quick check of the account would settle it fast.
Here’s the thing: that 50% figure used to be true. It just hasn’t been true since the end of 2022. A law change lowered it, and old pages (and AI summaries trained on them) keep repeating the outdated number, since nobody goes back and corrects a stale article once it’s published. This happens constantly with regulatory numbers online. Something changes, and the old figure keeps circulating for years because it’s easier to copy an existing article than to go check the source again.
So I want to walk through what the IRS actually says right now, in 2026, about required minimum distributions: what age they start, how the number is calculated, and what the real penalty is if you miss one. After a career spent helping people make the fine print usable, if there’s one thing I’ve learned, it’s that the gap between “what people think a rule says” and “what the rule actually says” is where money gets lost for no reason. This is exactly that kind of gap.
One thing up front: I’m a finance writer, not a CPA or a financial advisor, and this isn’t personalized tax advice. It’s what the rules currently say, sourced from irs.gov, so you can go verify your own numbers with your account custodian or a tax professional who knows your full picture.
What is a required minimum distribution, and who owes one in 2026?
An RMD is the minimum amount the IRS requires you to withdraw each year from most retirement accounts once you hit a certain age. The government deferred taxes on that money for decades, and eventually it wants a shot at collecting on it. According to the IRS’s own Retirement Topics — Required Minimum Distributions (RMDs) page, that age is currently 73. If you have a traditional IRA, SEP IRA, SIMPLE IRA, or most employer plans like a 401(k), and you’re 73 or older in 2026, you owe an RMD this year.
If you haven’t turned 73 yet, none of this applies to you yet, and you can stop worrying about it for now. Roth IRAs are the other big exception — more on that below.
How much do you actually have to withdraw?
The math is simpler than it sounds, and you don’t need special software to do it. Take your account balance as of December 31 of the previous year, then divide it by a number called the “life expectancy factor” for your age, which comes from the IRS’s Uniform Lifetime Table.
Here’s what that looks like at a few common ages, on a flat $500,000 balance:
| Your age this year | Life expectancy factor | RMD on a $500,000 balance |
|---|---|---|
| 73 | 26.5 | $18,868 |
| 75 | 24.6 | $20,325 |
| 78 | 22.0 | $22,727 |
| 80 | 20.2 | $24,752 |
Back to that hypothetical 75-year-old: taking a December 31 balance of $340,000 and dividing by 24.6 (the factor at age 75) lands on a required withdrawal of about $13,821 for the year — nowhere near the catastrophic number the outdated search result implied.
Worth repeating: this table resets every year, using your account balance from the prior December 31 and your age this year. It’s not a one-time calculation. You (or your custodian’s online tool) need to redo it annually. Most custodians (Fidelity, Vanguard, Schwab, and the rest) will calculate this for you automatically and show it right in your account, so you rarely have to do the division by hand. I still think it’s worth understanding where the number comes from, so a scary-looking dollar figure doesn’t catch you off guard the way it did in that example.
So what’s the actual penalty if you miss it?
Here’s the number that matters: per the IRS’s own Retirement Plan and IRA Required Minimum Distributions FAQs, the excise tax on a missed or short RMD is 25% of the shortfall — the difference between what you should have withdrawn and what you actually withdrew. That’s the current figure, not the 50% in the outdated example above.
And it gets better. If you catch and correct the mistake within two years, that penalty drops to 10% of the shortfall. So this isn’t a cliff — it’s steep, but there’s a real, meaningfully lower number available if you fix it promptly rather than ignoring it.
To put it in dollars: say you were supposed to withdraw $20,000 and you took nothing. The shortfall is the full $20,000. At 25%, that’s a $5,000 excise tax. Correct it within two years, and it drops to $2,000. Correct it before the deadline in the first place, and it’s zero.
I’m going to stop the numbers there, deliberately. There’s a specific IRS form involved in reporting a missed RMD and, in some cases, requesting relief from the penalty. That’s tax-filing paperwork, and walking through it accurately is a tax preparer’s job, not mine. If you’ve already missed a deadline, the honest next step is a call to your account custodian and a conversation with a tax professional, not a DIY form-filling guide from a blog.
When exactly is the deadline?
This trips people up more than the dollar math does. Two different rules apply depending on whether it’s your first RMD or not:
- Your very first RMD — the year you turn 73 — isn’t due until April 1 of the following year. If you turn 73 sometime in 2026, you actually have until April 1, 2027.
- Every RMD after that is due by December 31 of that same year.
That first-year extension sounds generous, but it has a catch worth flagging: if you delay your first RMD into the following spring, you’ll owe two RMDs in that calendar year — the delayed one from the prior year, due by April 1, plus the current year’s, due by December 31. That can push you into a higher tax bracket for that one year, which is exactly the kind of downstream tax-planning question I’m not going to get into here. It’s real, and it’s worth a conversation with a tax professional if it applies to you, but the mechanics of managing your bracket are outside what I can responsibly cover in this article.
Does this apply to a Roth IRA?
No. And this is genuinely one of the more useful things to know if you’re deciding where to keep money late in your career. The IRS states plainly that the RMD rules don’t apply to Roth IRAs, or to designated Roth accounts inside a workplace retirement plan, while the original owner is alive. If you’ve already converted meaningful money to Roth, or you split contributions between a traditional and a Roth account over the years, that Roth balance simply isn’t part of this calculation at all.
(Once the original owner dies, RMD rules do apply to whoever inherits the account — but that’s a different set of rules I’m not covering here.)
What I’d actually do about this
A few things, in order:
- Confirm your age-73 year with your own custodian, not a search result. Log into whatever platform holds the account and look for “required minimum distribution” in the account tools — most show you the exact dollar figure already calculated.
- Don’t wait until December to check. In the example above, finding this out in March leaves nine months of breathing room. If you’re finding this in November, you have a lot less.
- If it’s your first RMD year, decide on purpose whether to delay into the following April — knowing it means two distributions (and two years of taxable income from this account) landing in the same calendar year if you do.
- If you’ve already missed one, don’t guess your way through it. Call your custodian, then talk to a tax professional about your options. The 10%-within-two-years window is real, but using it correctly is paperwork territory I’m staying out of here.
That hypothetical 75-year-old ends up fine in this example — an actual RMD of about $13,800, not the catastrophic number the outdated search result implied — and the takeaway holds regardless of whose situation it resembles: the whole panic comes from one stale figure that somebody, somewhere, never bothered to correct.
If you’re still working out the broader retirement math (how much you should have saved by your age, or whether a 401(k) or Roth IRA makes more sense for your situation), I’ve written about how much you should have saved for retirement by age and the real differences between a 401(k) and a Roth IRA, both with the actual numbers behind them.
And if the Roth exemption above has you wondering whether converting some of this balance to a Roth before it starts generating RMDs would make sense for you, that’s a real number to run rather than guess at. Our Roth conversion calculator uses the 2026 federal tax brackets to show what converting a given amount would cost you in tax now, bracket by bracket, against the RMDs (and the taxes on them) you’d otherwise be stuck taking later.
Sources
- IRS, Retirement Topics — Required Minimum Distributions (RMDs) — RMD start age, first-year and subsequent deadlines.
- IRS, Retirement Plan and IRA Required Minimum Distributions FAQs — 25%/10% excise tax on a missed or short RMD, Roth IRA exemption.
- IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs) — Uniform Lifetime Table factors (Appendix B).
- 26 CFR §1.401(a)(9)-9(c), Uniform Lifetime Table — underlying Treasury regulation reproduced in Pub 590-B.
This article checked the following directly against irs.gov as of September 20, 2026: the 73 RMD age, the 25%/10% excise tax structure, the April 1 first-year deadline, the December 31 deadline for subsequent years, and the Roth IRA exemption. The Uniform Lifetime Table factors were cross-checked against the underlying Treasury regulation (26 CFR §1.401(a)(9)-9(c)), which IRS Publication 590-B’s own table reproduces. Rules like this get revised; if you’re making a real decision based on this, confirm the current numbers on irs.gov or with your account custodian before you act.