Key Points
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In most cases, retirees with tax-deferred retirement accounts must make withdrawals called required minimum distributions (RMDs) beginning at age 73.
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RMD amounts are determined by dividing the account balance from the previous year by the applicable IRS life expectancy factor (which is based on age).
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In 2026, the RMD for a 73-year-old with $500,000 in a traditional IRA as of December 31, 2025, will equal $18,868.
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In general, tax-deferred accounts such as traditional IRAs and 401(k) plans allow workers to reduce their taxable income by deferring taxes on qualified contributions. But the government will not let you defer tax payments forever.
Most individuals with tax-deferred retirement accounts must take required minimum distributions (RMDs) at a certain age, meaning they must withdraw a percentage of their account balance annually. Any contributions and investment gains are subject to income tax when the funds are withdrawn.
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Read on to learn more about RMDs, including when they begin and how to calculate the withdrawal amount for an account with a balance of $500,000.
These account types are subject to required minimum distributions (RMDs)
A required minimum distribution (RMD) is the smallest amount of money that retirees must withdraw from tax-deferred accounts each year. RMD rules apply to account holders and beneficiaries with the following plans:
Importantly, RMD rules do not apply to Roth accounts while the original owner is alive, but they do apply to Roth account beneficiaries.
In general, account holders must take RMDs by December 31 each year. The only exception is that the first RMD can be postponed until April 1. For instance, individuals who turned 73 in 2026 could delay their first RMD until April 1, 2027. However, all subsequent RMDs must be made before the end of the calendar year.
Here’s when required minimum distributions (RMDs) begin based on your birth date
The age at which you must begin taking required minimum distributions depends on your birth date. Details are provided in the chart below:
| Account Holder’s Birth Date |
Age When RMDs Begin |
| Before July 1, 1949 |
70 ½ |
| July 1, 1949, to December 31, 1950 |
72 |
| January 1, 1951, to December 31, 1959 |
73 |
| After December 31, 1959 |
75 |
Data source: Internal Revenue Service.
Anyone who does not take their RMD before the deadline will be penalized with an excise tax equal to 25% of the amount not withdrawn. The penalty can be reduced to 10% if the error is corrected within two years. The penalty can also be waived entirely if the account holder can show the shortfall was due to a reasonable error. In either scenario, the account holder must file a Form 5329 with their tax return.
How to calculate the required minimum distribution (RMD) on a $500,000 retirement account
Required minimum distribution amounts are calculated by dividing a life expectancy factor into the relevant account balance as of Dec. 31 of the previous year. For example, RMD amounts due by December 31, 2026, are based on account balances from December 31, 2025.
Individuals with more than one IRA must calculate the RMDs separately, but the total sum can be withdrawn from a single account or spread across multiple accounts. But that rule does not apply to defined contribution plans, such as 401(k) and profit-sharing plans. In those accounts, RMDs must be calculated and withdrawn separately. An exception applies to 403(b) accounts, which let account holders combine RMDs and withdraw the total from one or more 403(b) accounts.
The IRS publishes three life expectancy tables. Table 1 (Single Life Expectancy) is used for certain inherited accounts. Table II (Joint and Last Survivor Life Expectancy) applies when the account holder’s spouse is the sole beneficiary and is more than 10 years younger. And Table III (Uniform Lifetime) applies to most other account holders.
The chart shows an abbreviated reproduction of Table III (Uniform Lifetime) from the IRS. I will use this chart in the examples below.
| Age in Current Year |
Distribution Period |
| 73 |
26.5 |
| 74 |
25.5 |
| 75 |
24.6 |
| 76 |
23.7 |
| 77 |
22.9 |
| 78 |
22.0 |
| 79 |
21.1 |
| 80 |
20.2 |
Data source: Internal Revenue Service. Uniform Lifetime Table. RMDs are calculated by dividing the distribution period into the account balance from the previous year.
Here is an example: Mark turns 73 in 2026. He had $500,000 in in a traditional 401(k) plan as of December 31, 2025. His RMD amount is calculated as $500,000 divided by 26.5, which equals $18,868. As a reminder, because this will be Mark’s first RMD, he can delay the withdrawal until April 1, 2027. But his second RMD must still happen by December 31, 2027.
Here is another example: Kate turns 75 in 2026. She had $250,000 in a traditional IRA and $250,000 in a traditional 401(k) as of December 31, 2025. The RMD on her IRA is calculated as $250,000 divided by 24.6, which equals $10,163. The RMD on her 401(k) is calculated separately as $250,000 divided by 24.6, which equals $10,163.
Here is a final example: Robert turns 75 in 2026. He had $250,000 in one traditional IRA and $250,000 in another traditional IRA as of December 31, 2025. The RMD amounts will be the same as in the previous example, but Robert can combine the sums and withdraw the total (i.e., $20,326) from a single account.
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