“There is an occasion for everything, and a time for every activity under heaven.” — Ecclesiastes 3:1 (CSB)

For years, tax-deferred retirement accounts work in one direction: you contribute, the balance grows, and no one bothers you about withdrawals. Then a birthday arrives, and the IRS requires you to start taking money out — whether you need it that year or not. Required Minimum Distributions, or RMDs, are one of the least intuitive parts of retirement planning, and getting the details wrong carries a real cost. Here’s what to know.

What Triggers an RMD, and When

RMDs apply to most tax-deferred retirement accounts — traditional IRAs, 401(k)s, 403(b)s, and similar employer plans. Roth IRAs, and as of 2024, Roth 401(k)s and Roth 403(b)s, are exempt from RMDs during the original owner’s lifetime, which is one of several reasons some retirees consider Roth conversions in the years before RMDs begin.

The age at which RMDs start depends on your birth year, under the SECURE 2.0 Act:

• Born 1950 or earlier: RMD age was already reached under prior rules.
• Born 1951–1959: RMDs begin at age 73.
• Born 1960 or later: RMDs begin at age 75.

The Deadlines That Matter

Your very first RMD comes with a special option: you can delay it until April 1 of the year after you reach your RMD age, rather than taking it by December 31 of the year you turn that age. It sounds like a benefit, and it can be — but it comes with a catch. If you delay, you’ll owe two RMDs in that following calendar year: the delayed first one (by April 1) and the regular second one (by December 31). For many retirees, especially those still working part-time or managing other income, taking the first RMD in the year you actually reach RMD age — rather than delaying — keeps taxable income more level from year to year.

Every RMD after the first one is due by December 31 of each year, with no exceptions for holidays, market conditions, or forgetting.

The Cost of Missing One

The IRS does not treat a missed RMD lightly. The penalty is an excise tax of 25% of the amount that should have been withdrawn but wasn’t — reduced to 10% if the mistake is corrected within two years. On a meaningful account balance, that’s a costly error for something that’s entirely avoidable with a bit of planning. Most custodians, including Schwab, can set up automatic annual RMD withdrawals so the requirement is met without relying on memory alone.

Being Strategic — and Generous — with Your RMDs

RMDs are mandatory, but how you use the money isn’t fixed, and for charitably minded retirees, there’s a meaningful opportunity here.

Qualified Charitable Distributions (QCDs) allow IRA owners age 70½ or older to send funds directly from their IRA to a qualified charity — bypassing their own bank account entirely. The distribution counts toward that year’s RMD, but because it goes straight to the charity, it’s excluded from your adjusted gross income altogether. For 2026, the QCD limit is $111,000 per person, indexed for inflation each year.

That AGI exclusion matters more than it might first appear. Because a QCD lowers your AGI rather than simply generating a deduction, it can also help you avoid crossing thresholds tied to AGI — including Medicare IRMAA premium surcharges and the taxability of Social Security benefits. It’s also unaffected by new limits on itemized charitable deductions that took effect in 2026, since a QCD was never a deduction to begin with — it’s an exclusion. For a retiree who gives to their church or other ministries each year, directing some or all of an RMD there through a QCD can accomplish the giving and satisfy the RMD requirement in a single, tax-efficient move.

Roth conversions in the years between retirement and the start of RMDs are another strategy worth discussing with your advisor. Converting a portion of a traditional IRA to a Roth IRA during lower-income years means paying tax on that amount now, at potentially a lower rate, in exchange for a smaller required distribution — and less future tax — down the road. This isn’t the right move for every situation, and it depends heavily on your current tax bracket, timeline, and goals.

Bringing It to Your Team

RMD rules touch tax law, account custody, and your broader financial plan all at once, which is exactly why they’re worth reviewing with your advisor and CPA rather than navigating alone — particularly in the year they first apply to you, or any year your income or giving plans have changed. A short planning conversation before year-end is almost always easier than untangling a mistake after the deadline has passed. Schedule a Consultation.

This article is intended for general education and does not constitute personalized tax, legal, or investment advice. Tax rules referenced are current as of 2026 and are subject to change; please consult your CPA or tax advisor regarding your specific situation.

“From everyone who has been given much, much will be required, and from the one entrusted with more, even more will be asked.” — Luke 12:48 (CSB)