Understanding The IRA Distribution Rules
*This article is current as of January 1, 2026, but is subject to change.
Retirement accounts, like IRAs, are powerful tools for building financial security. But eventually the IRS requires you to begin taking withdrawals – called Required Minimum Distributions (RMDs). Knowing when and how much you must withdraw can help you avoid costly penalties and maximize tax-advantaged growth.
When Must I Start Taking RMDs?
The triggering age for taking RMDs has changed over time.
For instance, most IRA owners born before July 1, 1949, began taking RMDs once they turned age 70 ½.
Most owners born between July 1, 1949 and December 31, 1950 began taking RMDs once they turned age 72.
Most owners born between 1951 and 1959 began taking, or will begin to take, RMDs prior to December 31 in the year they turn 73. (Note that the first RMD can be delayed until April 1 of the subsequent year, but if the owner opts to do so, the owner must take two RMDs in that calendar year (April 1 and prior to December 31).)
Those born in the year 1960 or later must begin taking RMDs prior to December 31 in the year they turn 75. Subsequent withdrawals must also be taken prior to December 31 of each year.
How Are RMDs Calculated?
RMDs are based on:
- The value of your IRA at the end of the prior year, and
- A life expectancy factor from the IRS tables
Most people use the Uniform Lifetime Table, which is designed to stretch withdrawals over one’s lifetime. You may always withdraw more than the minimum, but withdrawing less can trigger a significant tax penalty.
Choosing Beneficiaries Matters
Who you name as your IRA beneficiary affects what happens after you die.
- Spouses can generally roll inherited IRA assets into their own IRA and continue tax-deferred growth.
- Most other beneficiaries (including adult children) must withdraw the entire balance within 10 years, though some exceptions apply (for example, for disabled beneficiaries or minor children until they reach age 21).
Because of these rules, it’s critical that your beneficiary designations reflect your wishes and are coordinated with your estate plan.
Planning Options
With proper planning, you may:
- Extend tax-deferred growth for your family
- Provide asset protection for heirs
- Avoid unintended tax consequences
- Use trusts for beneficiaries who need financial oversight
In some situations, a retirement trust can help ensure that IRA assets are protected and distributed according to your wishes, but these trusts must be drafted carefully under today’s rules.
Avoid Costly Mistakes
RMD and beneficiary rules have changed several times in recent years, and more guidance continues to develop. Because mistakes can result in unnecessary taxes or penalties (e.g., failing to take the correct RMD can result in a penalty of 25% of the amount that should have been withdrawn), it is wise to review your IRA strategy with an experienced advisor.
The law firm of Sjoberg & Tebelius, P.A., helps clients protect their retirement assets and plan for efficient wealth transfer.
Schedule a consultation today by calling 651-315-8856 or by sending us a message through our website.