Required Minimum Distributions (RMDs): The 2026 Rules Explained

Miss a Required Minimum Distribution and the IRS charges you 25% of whatever you should have taken out. That's down from 50% before 2023 — Congress decided a flat half of the missed amount was excessive, which, for what it's worth, it was. The rules changed twice in the last few years, and a lot of what's still online describes the old version.

Here's what actually applies in 2026: which accounts trigger an RMD, when they start, how the amount is calculated, and — since RetireFlexi's users are scattered across a few dozen countries — what changes, or doesn't, when the account holder lives abroad.

Which accounts actually require one

An RMD applies to money the IRS has never taxed: Traditional IRA, 401(k), 403(b), and SEP or SIMPLE IRA balances. The government let that money grow tax-deferred for decades. Eventually it wants its share, and RMDs are the mechanism that forces the withdrawal — and the tax bill — to actually happen.

Roth IRAs are the clean exception. No RMDs, ever, for the original account owner. Roth 401(k) and Roth 403(b) accounts used to be the confusing middle case: same tax-free growth as a Roth IRA, but the old rules still forced withdrawals from them, because technically they're employer-plan accounts rather than IRAs. SECURE 2.0 fixed that starting January 1, 2024. If you're still pulling money out of a Roth 401(k) every year because a broker's default settings or an old blog post told you it was required, it isn't — and hasn't been for over two years.

The age table

The starting age depends entirely on birth year, and it has moved twice since 2019:

The 1960 cutoff matters more than it looks. Someone born in December 1959 turns 73 in 2032 and starts RMDs that year. Someone born in January 1960 — thirteen months younger — doesn't start until 75, three years later than their older sibling. That's not a typo. SECURE 2.0 drew the line at the calendar year, not a smooth phase-in.

The April 1 trap

Your very first RMD comes with one flexible option that catches people out: you can delay it until April 1 of the year after you hit your RMD age, instead of taking it by December 31 of the year you turn 73 or 75. It sounds like a helpful grace period. Usually it isn't.

Delay that first withdrawal to the following April, and you still owe your second RMD by that same December 31 — so two distributions land in one tax year. Stack a $20,000 first RMD on top of a $21,000 second one, add Social Security and a UK State Pension already in payment, and plenty of people find themselves pushed into a higher tax bracket, or paying more for Medicare Part B under IRMAA, for that one year only. Taking the first RMD on time, in the year you actually turn the age, is usually the simpler and cheaper choice. The delay mainly suits people who expect meaningfully lower income the following year — someone retiring mid-year, for instance.

How much you actually have to withdraw

The formula is simple even if the reasoning behind the divisor isn't. Take your account balance as of December 31 of the previous year, divide it by the number the IRS Uniform Lifetime Table assigns to your age, and that's your RMD for the year.

Someone born in 1958 turns 73 in 2031. Say their Traditional IRA closed 2030 at $500,000. The IRS divisor for age 73 is 26.5. $500,000 ÷ 26.5 = $18,868 — the minimum they must withdraw and report as taxable income in 2031. Not a target. A floor. They can take more. They can't take less without triggering the penalty.

Multiple IRAs can be combined for this calculation — total the balances, take the combined RMD from any one account or split across several, whichever suits. 401(k)s don't get that flexibility. Each one's RMD has to be calculated and withdrawn from that specific plan. You can't satisfy a 401(k) RMD by taking extra out of an IRA, even if the total dollar amount withdrawn across everything is technically enough.

Qualified Charitable Distributions — the one legal workaround

There's one clean way to reduce the tax hit. Send some or all of your RMD directly from the IRA to a qualified charity — the custodian pays the charity, not you — and that amount doesn't count as taxable income at all. It isn't a deduction you claim later; it's excluded from income in the first place, which matters if you take the standard deduction and wouldn't have itemized a charitable gift anyway.

Qualified Charitable Distributions are available starting at 70½, which is genuinely not the same age as your RMD age — a mismatch that trips people up constantly. You can start directing money to charity this way years before any RMD is actually required. The 2026 limit is $105,000 per person, indexed for inflation each year, and it counts toward satisfying that year's RMD once you're at the age where one is due.

Inherited accounts: the 10-year rule

Inherit a Traditional IRA or 401(k) from someone other than a spouse, and a different set of rules applies. Most non-spouse beneficiaries — adult children are the typical case — must empty the account within 10 years of the original owner's death. There isn't a year-by-year minimum in every case, but there's an important exception: if the original owner had already started their own RMDs before they died, the beneficiary generally has to keep taking annual withdrawals through the 10-year window too, not just empty the account in one go at the end.

That specific rule had a rocky rollout. The IRS proposed it, then waived the penalty for missing those annual withdrawals for 2021 through 2024 while everyone — including the IRS itself — worked out the mechanics. Enforcement resumed for the 2025 distribution year. If you inherited an IRA in the last few years and have been treating it as a simple "empty it by year 10, whenever" account, it's worth checking whether the annual-withdrawal version of the rule actually applies to you.

Spousal beneficiaries have more flexibility — they can generally treat an inherited IRA as their own, roll it into their existing IRA, or remain a beneficiary under different rules entirely. That decision has enough moving parts to deserve its own explanation rather than a paragraph here.

RMDs while living abroad

None of this changes because you live outside the United States. A US citizen or green card holder with a Traditional IRA owes the same RMD in Lisbon or Chennai as they would in Ohio — citizenship and account type drive the obligation, not your mailing address.

What does change is the paperwork around it. Many foreign brokers won't act as custodians for a US IRA at all, which is why most American expats keep their existing US-based custodian rather than trying to move the account abroad. Distributions sent to a foreign address or foreign bank typically get 10% federal withholding by default — adjustable with a W-4R if it doesn't match your actual tax situation, particularly once a tax treaty enters the picture. The RMD itself still counts as ordinary income on your US return regardless of any treaty; treaties generally affect double-taxation relief through the Foreign Tax Credit, not whether the distribution is required or taxable in the US in the first place.

For the wider set of US filing obligations that come with holding these accounts abroad — FBAR, FATCA, and how the Foreign Earned Income Exclusion does or doesn't apply to retirement income — see the expat filing obligations guide. If you're weighing a US 401(k) against a UK SIPP or ISA specifically, the UK pension types guide covers the other side of that decision.

Does RetireFlexi model RMDs?

Not automatically, not yet. The calculator doesn't currently enforce mandatory withdrawals once you hit 73 or 75 — your tax-deferred accounts keep compounding in the projection exactly as if the IRS had no opinion on the matter, which can overstate how much is actually left in those accounts by your late 70s and beyond.

Whether that gap matters for your own plan depends on what you're actually doing with the account. Draw down a 401(k) or IRA aggressively in early retirement — which describes a lot of RetireFlexi's FIRE-minded and Coast FIRE users — and there may be very little left in it by 73 anyway, in which case an unmodeled RMD changes nothing because there's nothing left to force out. The gap is real for a narrower group: people whose Social Security, a UK State Pension, or a Defined Benefit pension already covers most of their spending, who let a large tax-deferred account sit untouched and compounding into their mid-70s. For that group specifically, today's projection can look a little rosier in the later years than it will actually be, because the tool doesn't yet force that money out and tax it on schedule.

There's a rough workaround available right now. The Lump Sums section supports negative-amount entries — a future outflow deducted from your portfolio at a specific age. Add one around your RMD-starting age, sized using the divisor method above, and you'll see the effect on your account balance trajectory. It won't run that amount through the tax engine as income the way a real RMD would, so treat it as a balance-side approximation rather than a full substitute — pad your assumed tax rate around that age too if you want the income-tax side reflected.

A proper, automatic version of this — using the actual Uniform Lifetime Table, applied from the correct age based on your birth year — is on the roadmap. If it's something you'd use, vote for it and it moves up the list.