What are the RMD rules, and what happens if I miss one?

When do RMDs actually start?

Later than a lot of people still assume — but the exact age depends on when you were born, and getting it wrong by even one day of birth date matters.

Under SECURE 2.0, the RMD starting age is 73 for anyone born between 1951 and 1959, and 75 for anyone born in 1960 or later. There’s no split-the-difference: someone born December 31, 1959 uses age 73; someone born one day later, on January 1, 1960, waits until 75. The IRS does give you a one-time grace period — your very first RMD can be delayed until April 1 of the year after you reach your starting age — but every RMD after that is due by December 31st of its own year.

How is the actual dollar amount calculated?

By formula, not by feel — which is exactly why it’s worth confirming rather than guessing.

Your RMD is your retirement account’s balance as of the prior December 31st, divided by a life-expectancy factor the IRS publishes in its tables — most commonly the Uniform Lifetime Table, which applies unless your spouse is your sole beneficiary and more than 10 years younger. That factor shrinks a little each year as you age, which means the required percentage of your account you must withdraw increases gradually over time. This has to be calculated separately for each IRA you own, though you’re allowed to take the combined IRA total from just one of them if that’s simpler — 401(k)s generally have to be withdrawn from each plan individually.

What actually happens if I miss one, or take out too little?

It’s a real penalty, but it’s no longer the penalty it used to be — and the IRS built in a second chance.

If you fail to withdraw the full RMD by the deadline, the shortfall can be hit with an excise tax of 25%. If you catch and correct the mistake within two years, that drops to 10%. That’s a meaningful improvement from the 50% penalty that applied before SECURE 2.0 — but at 10–25% of the shortfall, it’s still a cost worth avoiding entirely rather than planning to fix after the fact.

Does this apply to every retirement account I own?

No — and knowing which accounts are exempt is its own planning opportunity.

Roth IRAs are not subject to RMDs during the original owner’s lifetime, because the money was already taxed going in. Traditional IRAs, 401(k)s, 403(b)s, and similar pre-tax accounts are the ones the RMD rules apply to. This is part of why converting some pre-tax savings to Roth before RMD age is a strategy worth understanding on its own terms — it can shrink the pre-tax balance the RMD formula is applied to in the first place, though whether and how much to convert is a household-specific, CPA-and-adviser conversation, not a blanket recommendation.

Is there a way to take the RMD without it all counting as taxable income?

Yes, for charitably-inclined retirees — this is one of the more underused tools in the RMD rulebook.

A Qualified Charitable Distribution (QCD) lets you send RMD dollars directly from your IRA to a qualified charity. The distribution satisfies your RMD requirement, but because it goes straight to the charity rather than into your pocket, it isn’t added to your adjusted gross income the way a normal withdrawal would be. For someone who already gives to charity and doesn’t need the full RMD as spendable income, that’s a straightforward way to meet the requirement without inflating the income figure that other thresholds — Medicare premiums among them — are measured against.

What’s the first real step?

Confirm your actual RMD starting age based on your exact birth year, and get a real calculation — balance divided by the correct life-expectancy factor — rather than an estimate. If you’re within a few years of your starting age, that’s also the window to look at whether Roth conversions or QCDs belong in your plan before the requirement kicks in, not after.