How the IRS Calculates Required Minimum Distributions from Retirement Accounts
The IRS requires retirement account owners to withdraw a minimum amount starting at a specified age, generally calculated by dividing your account's prior year-end balance by an age-based factor from IRS Publication 590-B's tables.
Every year, the IRS requires most retirement account owners to withdraw a minimum amount once they reach a certain age, and the math behind that number is simpler than it looks. It comes down to one division problem: your account's prior year-end balance divided by a factor tied to your age. This explainer walks through exactly how that factor comes from the IRS's Uniform Lifetime Table, and how to run the calculation yourself.
Who has to take an RMD, and from which accounts
The required minimum distribution, or RMD, rules apply to original account holders and beneficiaries across a wide range of retirement accounts, including traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k) plans, 403(b) plans, 457(b) plans, profit sharing plans, and other defined contribution plans. Roth IRAs work differently: the original owner never has to take RMDs during their lifetime, but anyone who inherits a Roth IRA as a beneficiary does become subject to the RMD rules. If you own more than one IRA or retirement plan account, the RMD generally has to be calculated separately for each account, by dividing that account's own prior December 31 balance by the appropriate life expectancy factor from the IRS's Publication 590-B tables.
The account balance the IRS actually uses
The number you divide is not today's balance or the balance on the day you're calculating; it's the amount that was in the account at the end of the year before the RMD year. So for a 2025 RMD, you use the traditional IRA balance as of December 31, 2024. This detail matters because contributions made after that December 31 don't count toward the balance used for that year's RMD, and if you had a rollover in transit that wasn't sitting in any account at year-end, the IRS still requires you to add it back into the balance at the value it was received. In practice, most custodians report this year-end balance directly on your account statement, so you rarely have to reconstruct it yourself, but it's worth confirming the figure matches what the IRS expects before you calculate anything.
Where the divisor comes from: the Uniform Lifetime Table
Once you have the balance, the other half of the equation is the applicable denominator, a figure the IRS publishes by age in tables in Publication 590-B. This table assigns a specific number to each age. For example, the table lists an applicable denominator of 27.4 for an owner who is age 72, and a denominator of 24.6 for someone who is age 75. These factors apply to unmarried owners, to married owners whose spouse isn't more than 10 years younger, and to married owners whose spouse isn't the sole beneficiary of the account.
Imagine a retiree who turned 75 during 2025 and held $500,000 in a traditional IRA at the end of 2024. Using the age-75 factor from the Uniform Lifetime Table, the 2025 RMD is the prior year-end balance divided by that factor.
Worked example
That works out to roughly $20,325, which is the minimum this retiree must withdraw from that IRA for 2025. If they had multiple IRAs, the IRS requires the RMD to be figured separately for each account by dividing that account's own prior year-end balance by the applicable life expectancy factor, and the results can then be added together and satisfied from any combination of those IRAs.
- balance: 500000
- factor: 24.6
- Formula: balance/factor
- Result: 20325.20325203252
Prior year-end balance of $500,000 divided by the age-75 distribution period of 24.6.
When the applicable age changes: 73 now, 75 later
For IRA owners today, the first RMD is due by April 1 of the year following the year they turn 73, and every RMD after that first one is due by December 31 of each year, though 401(k), 403(b), and other defined contribution plan participants may have their required beginning date pushed to April 1 following the later of reaching age 73 or actually retiring, if the plan allows that delay. Looking further ahead, IRS guidance confirms that under SECURE 2.0, the applicable age rises from 73 to 75 specifically for individuals who turn 74 after December 31, 2032. For that group, the required beginning date becomes April 1 of the calendar year following the year they reach the new applicable age of 75. In other words, the age-73 rule is the current standard for most IRA owners, but anyone born late enough to turn 74 after December 31, 2032 will start their RMDs at the later applicable age of 75.
- Step 1 — Find the account balance: use the amount in the traditional IRA at the end of the year before the RMD year, adding back any rollover funds not held in an account at year-end.
- Step 2 — Find your age for the year: locate the row in the Uniform Lifetime Table that matches your age for the year, which lists denominators such as 27.4 at age 72 and 24.6 at age 75.
- Step 3 — Read the applicable denominator: for example, 27.4 at age 72 or 24.6 at age 75.
- Step 4 — Divide: balance ÷ denominator equals that account's RMD for the year.
- Step 5 — Repeat per account: the IRS requires the RMD to be figured separately for each account, and while multiple IRAs (or, separately, multiple 403(b) accounts) can be aggregated to satisfy the total, RMDs cannot be combined across different plan types, such as an IRA and a 401(k).
What happens if you miss it
Skipping an RMD, or withdrawing less than required, carries a real cost. The IRS can impose a 25% excise tax on the amount that should have been distributed but wasn't. That penalty drops to 10% if you correct the shortfall within a two-year correction window, and the shortfall is reported on Form 5329. Because the penalty is calculated on the shortfall, not the whole RMD, the fastest way to limit damage after realizing you missed a distribution is to withdraw the missing amount as soon as possible and file the correction paperwork promptly.
Key takeaways
- Your RMD is generally figured separately for each account by dividing that account's prior year-end balance by the applicable life expectancy factor from the tables in IRS Publication 590-B.
- The balance used is the amount in the account on December 31 of the year before the RMD year, adjusted for certain in-transit rollovers.
- At age 72 the table factor is 27.4, and at age 75 it's 24.6, with the factor generally decreasing as age increases; these Uniform Lifetime Table figures apply to unmarried owners and to married owners whose spouse isn't both more than 10 years younger and the sole beneficiary.
- IRA owners currently must take their first RMD by April 1 following the year they turn 73, and every later RMD by December 31.
- Missing an RMD can trigger a 25% excise tax on the shortfall, or 10% if corrected within two years.
Uniform Lifetime Table: selected ages and factors
| Age | Applicable Denominator |
|---|---|
| 72 | 27.4 |
| 75 | 24.6 |
Two example rows from the Uniform Lifetime Table in IRS Publication 590-B, which lists an applicable denominator of 27.4 at age 72 and 24.6 at age 75.
Frequently asked questions
Does the RMD calculation use my current account balance?
No. The IRS defines the balance used as the amount in the account at the end of the year before the RMD year, not the balance on the day you calculate or withdraw funds. Contributions made after that prior December 31 don't count toward the figure, though certain outstanding rollovers not held in any account at year-end must be added back at the value received.
Do Roth IRAs require RMDs?
Not for the original owner during their lifetime; that group is exempt from RMDs entirely. However, anyone who inherits a Roth IRA as a beneficiary is subject to the RMD rules, unlike the original owner.
Can I combine RMDs from different accounts to satisfy the requirement?
Generally, the RMD must be figured separately for each account by dividing that account's own prior year-end balance by the applicable life expectancy factor. Multiple IRAs owned by the same person can typically be aggregated so the total is withdrawn from any combination of them, but this aggregation does not extend across different plan types, such as combining an IRA RMD with a 401(k) RMD.
When exactly is my first RMD due?
For IRAs, including SEP and SIMPLE IRAs, the first RMD is due by April 1 of the year following the calendar year in which you reach age 73, and every RMD after that is due by December 31 of each subsequent year.
Will the RMD starting age change in the future?
Yes, for a specific group. IRS guidance confirms that under SECURE 2.0, the applicable age rises from 73 to 75 for individuals who turn 74 after December 31, 2032, with the required beginning date shifting to April 1 of the year following the year they reach that new age of 75.
What's the penalty if I take less than my RMD?
The IRS can charge a 25% excise tax on the portion of the RMD that wasn't distributed, reduced to 10% if you correct the shortfall within a two-year correction window.
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