Less than 12 weeks remain for account holders who have reached age 73 to complete their 2026 required minimum distributions (RMDs), according to the Internal Revenue Service (IRS).
Miss that date and the IRS imposes an excise tax on any amount that should have been withdrawn but was not, a penalty that the SECURE 2.0 Act of 2022 reduced from 50% to 25%.
A single missed distribution from a six-figure retirement account can still trigger a four-figure tax bill on top of the ordinary income taxes owed once the distribution is eventually taken.
Also Read: Fidelity flags the RMD trap that quietly raises your taxes
The Dec. 31 deadline has a steep penalty for late withdrawals
The IRS requires anyone who has reached age 73 to take an RMD from their traditional individual retirement account (IRA), Simplified Employee Pension (SEP) IRA, Savings Incentive Match Plan for Employees (SIMPLE) IRA, 401(k), or 403(b) plan by Dec. 31 of each year.
The only exception applies to retirees taking their first RMD, who may delay that initial withdrawal until April 1 of the following year.
Delaying that first distribution creates a trap that catches many first-time filers off guard.
A retiree who turns 73 in 2026 and waits until April 1, 2027, must still complete a second RMD by Dec. 31, 2027, stacking two taxable withdrawals into a single calendar year, the IRS noted.
Missing the deadline means the IRS applies the 25% excise tax to the portion of the RMD that was not withdrawn.
Account holders who discover the error and correct it within two years can reduce that penalty to 10% by filing Form 5329 with their federal tax return for the year in which the full RMD was required, the IRS stated.
SECURE 2.0 raised the starting age and eliminated RMDs on Roth employer accounts
The age at which RMDs begin has shifted several times over the past several years as Congress expanded the window in which retirees can let tax-deferred savings compound.
The original SECURE Act of 2019 raised the starting age from 70½ to 72 for people born on or after July 1, 1949, and the SECURE 2.0 Act pushed it further to 73 for anyone born on or after Jan. 1, 1951, the IRS outlined.
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Account holders born after Dec. 31, 1959, will not face their first RMD until they reach age 75 under the same law, giving younger retirees an even longer runway.
The 2022 law also eliminated required minimum distributions on Roth 401(k) plans and Roth 403(b) plans while the original account holder is alive, removing a discrepancy that had long frustrated savers who already paid taxes on those contributions, the IRS FAQ page confirmed.
Roth IRAs have never required distributions during the owner’s lifetime, and that rule remains unchanged.
Retirees holding both traditional and Roth employer accounts only need to calculate RMDs on the traditional balances, since Roth employer plan balances can remain invested without generating a required withdrawal.
How to calculate the correct withdrawal and avoid common mistakes
Each year’s RMD is calculated by dividing the account balance as of Dec. 31 of the prior year by a life expectancy factor published in one of three tables in IRS Publication 590-B.
Most account holders use Table III, known as the Uniform Lifetime Table, while beneficiaries typically use Table I for single life expectancy, the IRS stated.
At age 73, the Uniform Lifetime Table assigns a divisor of 26.5, meaning a retiree with a $500,000 traditional IRA balance as of December 31, 2025, would owe a 2026 required minimum distribution of roughly $18,868, Publication 590-B shows.
That divisor shrinks each year as the account holder ages, pushing the required withdrawal percentage steadily higher over time.
Aaron Gaines, President and Founder of Gaines Capital Management, urged retirees to treat the RMD calculation as one component of a full-year income strategy instead of handling it as a standalone tax chore.
<strong>Tax preparation tells you what already happened. Tax planning asks what we can still do before it happens</strong>.
For people with multiple traditional IRAs, the IRS allows them to calculate the RMD for each account separately, then withdraw the combined total from just one IRA, the IRS FAQ noted.
That flexibility does not extend to 401(k) plans from different employers, which must each produce their withdrawal.
How to complete your 2026 withdrawal without triggering the excise tax
Gaines recommended that retirees evaluate their full income picture, including Social Security, pensions, and investment gains, before deciding when and how to take the distribution.
Retirees who are charitably inclined can direct up to $111,000 per person through a qualified charitable distribution (QCD) starting at age 70½, which satisfies the RMD and does not count toward adjusted gross income, Fidelity noted.
Retirees who have not yet started the withdrawal process should avoid waiting until the final weeks of December, since the process may take several weeks to complete, The Motley Fool noted.
Every account holder bears sole responsibility for ensuring the full required amount leaves each qualifying plan by the end of the calendar year, even when a custodian offers to calculate the figure or send reminders on the account holder’s behalf, the IRS FAQ stated.
