How the IRS Calculates Required Minimum Distributions From a Traditional IRA

If you own a traditional IRA and you're turning 73, the IRS wants you to start withdrawing money whether you need it or not. The good news is that the math behind your required minimum distribution, or RMD, isn't a mystery — it's a simple division problem that uses a table published in IRS Publication 590-B. Here's exactly how the IRS gets to that number, using a hypothetical $500,000 account as an example.

Who actually has to take an RMD

Under current law, as amended by SECURE 2.0, you must begin taking RMDs starting the year you turn 73, provided you reached age 72 after December 31, 2022. That age-73 rule doesn't apply to everyone the same way — people who turned 72 between 2020 and 2022 were already required to start at 72, and those who reached 70½ before 2020 started even earlier, so your personal required beginning date depends on your birth year. One notable exception: Roth IRA owners are not required to take RMDs during their own lifetime, unlike traditional IRA owners, though beneficiaries who inherit a Roth IRA are still subject to RMD rules.

The formula behind every RMD

At its core, an RMD calculation is just your account balance divided by a life-expectancy factor called a distribution period, or divisor. The balance the IRS uses isn't today's balance — it's the account's value as of December 31 of the prior year, which is why RMDs can shift from year to year even if you don't add or withdraw anything in between. The divisor comes from the IRS's Uniform Lifetime Table, officially Table III in Publication 590-B, and it's built around your age in the distribution year, not the age you'll turn later. For a 73-year-old, the IRS's own worked example in Publication 590-B uses a divisor of 26.5. That divisor isn't static: it shrinks as you age, moving down to 25.5 at 74 and 24.6 at 75, which means the same account balance produces a larger required withdrawal percentage each year you get older.

Worked example: a $500,000 IRA at age 73

Picture a 73-year-old with $500,000 in a traditional IRA as of December 31 of the previous year. Applying the IRS formula, you divide that balance by the Table III divisor for age 73, which is 26.5. $500,000 divided by 26.5 equals $18,867.92, and that's the minimum amount this hypothetical owner must withdraw for the year. This example assumes the owner is unmarried, or that if married, the spouse isn't a sole beneficiary more than 10 years younger, since that situation uses a different table with different divisors.

• balance: 500000
• divisor: 26.5
• Formula: balance/divisor
• Result: 18867.92

Based on the Uniform Lifetime Table (Table III) divisor of 26.5 for age 73, using the prior year-end account balance.

When the money actually has to come out

The very first RMD gets a grace period: you can delay it until April 1 of the year after you reach your required beginning date at age 73, rather than taking it by December 31 of the year you turn 73. That delay is a one-time courtesy, though, and it comes with a catch worth planning around: if you push your first RMD into the following spring, you'll also owe your second RMD by December 31 of that same year, potentially doubling up your taxable withdrawals in one calendar year. Every RMD after that first one follows a simpler rule — it must be withdrawn by December 31 of that year, full stop.

What happens if you withdraw too little

Missing your RMD, or taking out less than required, means you may have to pay an excise tax under IRS rules — up to 25% of the amount you should have withdrawn but didn't. That penalty can shrink substantially if you act quickly: the rate drops to 10% if you withdraw the shortfall and file a return reporting the tax within a defined correction window. That window isn't open-ended — it closes at the earliest of receiving an IRS deficiency notice, having the tax assessed, or the end of the second tax year after the tax was originally imposed, so the sooner you catch and fix a shortfall, the better your outcome.

• Step 1 — Applicable divisor: the Uniform Lifetime Table (Table III) number tied to the owner's age in the distribution year, which is 26.5 for age 73.
• Step 2 — Required minimum distribution: balance divided by divisor, which comes to $18,867.92 for this example.
• Step 3 — Deadline: December 31 of the distribution year for ongoing RMDs, or April 1 of the following year only for the very first one.

IRA balance divided by the Table III divisor for age 73.

Key takeaways

• Traditional IRA owners generally must start RMDs the year they turn 73, if they reached age 72 after December 31, 2022.
• Only your first RMD can be delayed to April 1 of the following year; every RMD after that is due by December 31.

How the Table III divisor shifts with age

Age in distribution year	Table III divisor
72	27.4
73	26.5
74	25.5
75	24.6

Illustrative divisors from the IRS Uniform Lifetime Table (Table III), based on the age reached in the distribution year.

How to calculate and take your own RMD

1. Look up your age for the distribution year in the IRS's Uniform Lifetime Table (Table III) in Publication 590-B to find your divisor, which is 26.5 at age 73; this table applies to most owners, though those whose spouse is their sole beneficiary and more than 10 years younger use a different table (the Joint Life and Last Survivor Table) instead.
2. Divide your prior year-end balance by that divisor to get your required minimum distribution for the year.
3. Withdraw at least that amount by December 31 of the distribution year, unless it's your very first RMD, which can wait until April 1 of the following year.
4. If you're short, withdraw the missed amount and file the required return promptly to potentially qualify for the reduced 10% excise tax instead of the full 25%.

Why is the divisor 26.5 for a 73-year-old and not some other number?

The 26.5 figure comes directly from the IRS's Uniform Lifetime Table (Table III) in Publication 590-B, which assigns a specific divisor to each age. That divisor is smaller at older ages, so the same balance yields a larger required withdrawal as the owner ages, dropping to 25.5 at 74 and 24.6 at 75.

What's the deadline for taking my first RMD versus later ones?

Your very first RMD can be delayed until April 1 of the year after you reach your required beginning date at age 73. Every RMD after that first one must be withdrawn by December 31 of that year instead.

What happens if I withdraw less than my required minimum distribution?

The IRS can impose an excise tax of up to 25% on the amount you should have withdrawn but didn't. That rate can drop to 10% if you withdraw the shortfall and file a return reporting the tax within the IRS's correction window, which closes at the earliest of a deficiency notice, an assessment, or the end of the second tax year after the tax was imposed.

Sources

• www.irs.gov
• www.irs.gov