If you have money sitting in a traditional IRA, 401(k), or most other pre-tax retirement accounts, there will come a point when the IRS requires you to start taking money out — whether you need it or not.
These are called Required Minimum Distributions, or RMDs. They’re one of the most misunderstood rules in retirement planning, and for people with meaningful savings, they can create a significant and unexpected tax burden if you’re not prepared.
This guide covers many of the important points you need to know: what RMDs are, when they start, how they’re calculated, what they mean for California taxpayers specifically, and — most importantly — what you can do to manage them strategically before they start. [1]
Quick answer on when RMDs start
Your RMD starting age depends on your date of birth, not just your birth year. The table below summarizes the current required beginning ages for original account owners. [3]
For most retirement account owners, the first Required Minimum Distribution (RMD) must be taken by April 1 of the year following the year they reach their RMD age. After the first distribution, RMDs are generally due by December 31 each year. [1]
What an RMD is and which accounts it applies to
An RMD is the minimum amount you must withdraw each year once you reach your applicable RMD age. The rule applies to traditional IRAs, SEP IRAs, SIMPLE IRAs, and most defined contribution workplace plans such as 401k and 403b accounts. [1]
RMD rules generally do not apply to Roth IRAs during the original owner’s lifetime. Designated Roth accounts inside 401k and 403b plans also generally do not require lifetime RMDs for the original owner, although beneficiaries remain subject to post-death distribution rules. [1]
First-year timing rule you should understand
If you delay your first-year RMD until the April 1 deadline, you may end up taking two RMDs in the same calendar year: the delayed first-year RMD plus the second-year RMD due by December 31. This can increase taxable income in that year. [1]
How RMDs are calculated
A standard RMD calculation divides your prior year-end account balance by an IRS distribution period (life expectancy factor) from the Uniform Lifetime Table. A different table is used if your spouse is your sole beneficiary and is more than 10 years younger than you. [1]
Examples below illustrate the mechanics using the Uniform Lifetime Table factor for age 73 (26.5) and a sample factor for age 80 (20.2). [3]
Prior year-end balance — Age — Factor — Approximate RMD
If you have multiple traditional IRAs, you generally calculate each IRA’s RMD separately, but you may aggregate the total and take it from one or more of your IRAs. This aggregation rule generally does not apply across separate 401k plans, which usually must satisfy RMDs plan-by-plan. [4]
You can withdraw more than your RMD, but excess withdrawals generally do not reduce future-year RMD requirements. [4]
Why RMDs can matter more in California
If you are a California [5] resident, retirement account distributions that are taxable for federal purposes are generally taxable for California as well, and California does not provide a statewide exclusion that broadly exempts retirement account withdrawals. [5]
California does not tax U.S. Social Security benefits. [5]
California’s personal income tax rates range from 1% to 12.3%, with an additional 1% tax over $1,000,000 of taxable income, making the maximum personal income tax rate 13.3%. [6]
The Medicare IRMAA issue
Large RMDs can increase your modified adjusted gross income and may trigger income-related monthly adjustment amounts, commonly called IRMAA. IRMAA increases monthly Medicare Part B premiums and adds a surcharge to Part D premiums for higher-income beneficiaries. [7]
For 2026, CMS lists the standard Part B premium as $202.90 per month, and the Part B IRMAA tiers begin above modified adjusted gross income of $109,000 for individual filers and $218,000 for joint filers. [8]
SSA explains that, for 2026 IRMAA determinations, SSA generally uses the most recent federal tax return information available, typically the return filed in 2025 for tax year 2024. [7]
RMDs and federal taxation of Social Security benefits
RMDs can also increase how much of your Social Security becomes taxable at the federal level because the calculation depends on the total of one-half of your benefits plus other income. [9]
IRS Publication 915 describes that Social Security taxation can apply when the total of one-half of your benefits and your other income exceeds $34,000 for individuals or $44,000 if married filing jointly, and the taxable portion can be as high as 85% in certain cases. [9]
For California residents, Social Security benefits are not taxed by California, but the federal tax treatment still applies. [5]
Strategies to reduce the tax impact of RMDs
Roth conversions can reduce future RMD exposure by shifting dollars from tax-deferred accounts into Roth accounts. Roth IRAs generally are not subject to lifetime RMDs for the original owner, and designated Roth workplace accounts similarly generally avoid lifetime RMDs for the original owner. [1]
Qualified charitable distributions, or QCDs, may be a powerful strategy for charitably inclined individuals age 70½ or older. IRS Notice 2025-67 states that the aggregate amount of QCDs excludable from gross income increases to $111,000 for 2026. [10]
Publication 590-B explains that a QCD counts toward the RMD and illustrates how the distribution is reported on Form 1040 while the taxable amount can be zero when properly treated as a QCD. [3]
If you are still working, employer plan RMDs may be delayed in some cases until the year you retire if the plan allows, while IRAs generally still require RMDs by the normal deadline. The still-working exception does not apply to 5% owners. [4]
A qualifying longevity annuity contract, or QLAC, can reduce near-term RMDs by excluding the QLAC value from the account balance used to determine RMDs before annuitization. The IRS Form 1098-Q instructions state that, prior to annuitization, the value of a QLAC is excluded from the account balance used to determine RMDs. [11]
Those same instructions state that QLAC distributions must begin no later than a specified annuity starting date that is no later than the first day of the month after the employee’s 85th birthday. [11]
For 2026, IRS Notice 2025-67 states that the limitation on premiums paid for a QLAC remains $210,000. [10]
Inherited accounts and the 10-year rule
Beneficiaries face different distribution rules than original owners. The IRS explains that, for many defined contribution plan participants or IRA owners who die after December 31, 2019, the entire balance generally must be distributed within ten years, with exceptions for certain categories such as a surviving spouse, a minor child, disabled or chronically ill individuals, or an individual not more than ten years younger than the decedent. [12]
The IRS Beneficiary page defines the 10-year rule as requiring the account to be emptied by the end of the 10th year following the year of death and lists the eligible designated beneficiary categories. [13]
A key planning nuance is how annual distributions interact with the 10-year rule in certain cases. IRS Notice 2024-35 describes that, under the interpretation in the proposed regulations, when an employee dies on or after the required beginning date and the beneficiary is not an eligible designated beneficiary, the beneficiary must take annual RMDs beginning in the year after death and still fully distribute the account by the end of the 10th year. [14]
The 2024 final regulations provide the effective and applicability timeline for the updated regulatory framework, including applicability for calendar years beginning on or after January 1, 2025. [15]
Inherited Roth IRAs
Roth IRAs are not subject to lifetime RMDs for original owners, but inherited Roth IRAs are generally subject to distribution rules similar to inherited traditional IRAs. The IRS Beneficiary page states that inherited Roth IRA accounts are generally subject to the same RMD requirements as inherited traditional IRA accounts and explains the general tax-free treatment of contributions and many earnings withdrawals, with the five-year rule caveat for earnings. [13]
Penalties for missing an RMD
If you do not take the full required amount, the IRS states you may owe a 25% excise tax on the amount not distributed (reduced to 10% if corrected within 2 years). [1]
IRS Notice 2024-35 describes the same SECURE 2.0 change: 25% generally, reduced to 10% if corrected within the correction window. [14]
Frequently asked questions
At what age do RMDs start
Your RMD starting age depends on your date of birth. Use the date-of-birth ranges above for 70½, 72, 73, or 75. [2]
Do Roth IRAs have RMDs
Roth IRAs generally are not subject to lifetime RMDs for the original owner, but beneficiaries are subject to distribution rules. [1]
Can I take more than my RMD
Yes. You can withdraw more than the RMD, but excess withdrawals generally do not reduce future-year RMD requirements. [4]
What if I have multiple traditional IRAs
You generally can aggregate IRA RMDs and take the total from one or more IRAs. [4]
Are RMDs taxed in California
California generally taxes taxable retirement distributions, but does not tax U.S. Social Security benefits. [5]
Closing note
If you have a significant pre-tax retirement balance, the years before your required beginning date are often the most flexible window for managing future tax exposure, Medicare premium risk, and beneficiary distribution outcomes. [2]
This article is for educational purposes only and does not constitute personalized financial, tax, or legal advice. Tax rules can change, and beneficiary distributions can vary by account type and facts. If you’re approaching RMD age and want help coordinating withdrawals with your tax strategy, you can schedule a conversation here.
Reference Citations:
- https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds
- https://www.congress.gov/crs-product/IF12750
- https://www.irs.gov/publications/p590b
- https://www.irs.gov/retirement-plans/rmd-comparison-chart-iras-vs-defined-contribution-plans
- https://www.ftb.ca.gov/forms/2024/2024-1005-publication.pdf
- https://www.ftb.ca.gov/about-ftb/data-reports-plans/summary-of-federal-income-tax-changes/index.html
- https://www.ssa.gov/benefits/medicare/medicare-premiums.html
- https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
- https://www.irs.gov/publications/p915
- https://www.irs.gov/pub/irs-drop/n-25-67.pdf
- https://www.irs.gov/instructions/i1098q
- https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs
- https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary
- https://www.irs.gov/pub/irs-drop/n-24-35.pdf
- https://www.federalregister.gov/documents/2024/07/19/2024-14542/required-minimum-distributions
