A required minimum distribution is calculated account by account before it becomes a household withdrawal. That is why the year-end problem often begins months before December. One missing IRA, one old workplace plan or one misunderstood aggregation rule can leave the total short.
The IRS says retirement account owners generally begin RMDs for the year they reach age 73. Traditional IRAs, SEP IRAs, SIMPLE IRAs and many employer plans are covered. Original owners of Roth IRAs do not take lifetime RMDs, though beneficiaries can face separate rules.
For most continuing recipients, the 2026 amount is based on the account balance at December 31, 2025 divided by the applicable life-expectancy factor. The correct table depends on the owner and beneficiary situation.
The standard deadline is December 31. The first RMD can generally be delayed until April 1 of the following year, but doing so can place two taxable distributions in that following calendar year.
August is early enough to find every account, obtain missing balances, correct beneficiaries and choose where cash will come from. It is late enough that the current-year tax picture is beginning to take shape.
The divisor changes every year
Many IRA owners use the Uniform Lifetime Table in Publication 590-B. The distribution period is 26.5 at age 73, 20.2 at age 80, 12.2 at age 90 and 8.9 at age 95.
A smaller divisor produces a larger required percentage of the prior year-end balance. Using the selected factors, the implied withdrawal is about 3.77% at 73, 4.95% at 80, 8.20% at 90 and 11.24% at 95.
Those percentages are illustrations, not substitutes for the table. Use the owner’s age during 2026 and the correct table. If the sole beneficiary is a spouse more than ten years younger, the Joint and Last Survivor Table can apply. Beneficiaries may use the Single Life Expectancy Table under applicable rules.
Calculate from the official December 31 balance supplied by the custodian. A current account value is not the starting point merely because it is easier to find.
Record the factor, balance and result for every account. Keep the statement or tax document supporting the balance with the worksheet.
Aggregation is limited by account type
An IRA owner must calculate the RMD separately for each IRA. The owner can generally withdraw the combined IRA amount from one or more of those IRAs.
Similar aggregation can apply among 403(b) contracts after each contract’s RMD is calculated. That flexibility does not normally cross into a 401(k), 457(b) plan or another plan category.
RMDs from 401(k) and 457(b) accounts generally must be taken separately from each plan. A large withdrawal from an IRA does not automatically satisfy a missed workplace-plan RMD.
Build distinct sections in the ledger: traditional and rollover IRAs, SEP and SIMPLE IRAs, 403(b) contracts, 401(k)s, 457(b)s and inherited accounts. Do not combine categories merely because the accounts appear on one adviser dashboard.
Inherited accounts require their own analysis. The beneficiary’s relationship, the owner’s death date and whether the owner had reached the required beginning date can change annual and ten-year distribution obligations.
The first-year delay can create a tax bunching problem
A person taking the first RMD may generally delay it until April 1 of the next year. The second RMD is still due by December 31 of that same next year.
Two distributions in one tax year can raise adjusted gross income, affect Medicare IRMAA in a later premium year, increase taxation of Social Security benefits and alter deductions or credits.
Compare taking the first distribution during 2026 with delaying it into early 2027. Include other income, charitable plans, capital gains, Roth conversions and expected tax-law changes.
The delay is not inherently good or bad. It is an option whose value depends on the two tax years. A lower-income current year may favor taking the distribution sooner; an unusually high-income current year may favor delay.
Do not wait until December to ask the custodian whether a distribution can be completed on time. Funds may need to be sold, trades settled and bank instructions verified before cash moves.
Choose the funding asset deliberately
The RMD is a tax rule, not an investment recommendation. Decide which asset to sell based on the household allocation, liquidity needs and tax characteristics.
If the account holds cash from dividends or maturities, that may fund the distribution without selling securities. If the portfolio has drifted, the RMD can be used to reduce an overweight position and rebalance.
An in-kind distribution can move securities from an IRA to a taxable account when the custodian permits it. The fair value at distribution counts toward the RMD and becomes relevant to future tax basis. The distribution remains taxable to the extent applicable even though no cash was received.
Withholding can be taken from the distribution. Federal tax withholding from an IRA distribution can receive special timing treatment for estimated-tax purposes, but state rules differ. Coordinate the percentage with the full-year tax projection.
A qualified charitable distribution may satisfy all or part of an RMD for an eligible IRA owner when the detailed requirements are met and the payment goes directly to an eligible charity. It should be arranged before taking the same dollars personally.
Do not assume the custodian owns the responsibility
Custodians often calculate an IRA RMD, but the IRS says the account owner remains responsible for the correct amount and deadline.
A custodian may not know about accounts held elsewhere, a spouse’s age, a beneficiary change, prior year-end adjustments or the distribution already taken from another IRA.
Compare every custodian calculation with the household ledger. Reconcile transfers so the same balance is not counted twice or omitted. A trustee-to-trustee transfer during the year does not erase the prior year-end balance.
Confirm that automatic distributions are still active, that the destination bank account is open and that address and identity records are current. An automatic instruction can fail because of an account restriction or rejected transfer.
Save confirmation after the distribution posts. The request date is not always the distribution date shown for tax purposes.
A missed amount has a correction path, not a reason to wait
The IRS states that a missed RMD amount may face a 25% excise tax, potentially reduced to 10% when corrected within the applicable two-year window. Form 5329 is used to report the additional tax.
The agency can waive the tax when the shortfall resulted from reasonable error and reasonable steps are being taken to correct it. That relief requires action and explanation; it should not be assumed.
If a shortfall is discovered, calculate it, contact the custodian, take corrective steps and consult a qualified tax professional. Preserve evidence of the error and correction.
Taking more than required in one year does not create credit against a future year’s RMD. Each year stands on its own calculation.
That makes over-withdrawing an unreliable fix for uncertainty. Accuracy, documentation and timely completion are better than a large round-number distribution made without reconciliation.
Build the ledger now
List every account, custodian, account type, December 31 balance, applicable table, factor, calculated RMD, distribution already taken, remaining amount, withholding election and processing deadline.
Add a separate line for any inherited account and for any workplace plan that remains outside an IRA. Mark which IRA and 403(b) totals may be aggregated and which plans require their own withdrawal.
Choose the funding asset and destination account before placing the order. Verify beneficiary designations while the account file is open, but remember that a beneficiary update can affect future rules and estate planning beyond the current RMD.
Recheck the ledger in November and again after the final distribution posts. Save year-end confirmations for tax preparation.
Ask each custodian for its final processing date for trades, charitable transfers, in-kind distributions and bank delivery. The legal deadline may be December 31, but operational cutoffs can arrive earlier.
Review state withholding and estimated payments before submitting the request. A distribution that solves the federal RMD can still create an avoidable state-tax surprise if the election is left blank.
The December deadline is simple only after the account map is complete. Start in August, when missing information is an inconvenience rather than an emergency.
Jasper Kellan is editor of The Perspective Log. This article is general information, not personal investment, tax or legal advice. Published August 24, 2026.
Primary sources: Internal Revenue Service, Required Minimum Distribution FAQs; Internal Revenue Service, Publication 590-B; Internal Revenue Service, Individual Retirement Arrangements; Internal Revenue Service, Form 5329 Instructions.
