Common required minimum distribution strategies include qualified charitable distributions, Roth conversions before RMD age, and careful timing of the first withdrawal. Each may change a household's tax picture, but each has limits, such as eligibility rules, taxable conversion income, and the possibility of two distributions in one year. Fit depends on individual circumstances.
For pre-retirees and retirees across Allentown, Bethlehem, and Easton, required minimum distributions, RMDs for short, are one of the more mechanical but consequential parts of a retirement income plan. Once you reach a certain age, the IRS requires you to start withdrawing a minimum amount from most tax-deferred retirement accounts each year, whether you need the cash flow or not. The SECURE Act 2.0 changed the RMD age rules in recent years, and many households in this area are still working out how the new timeline applies to their own birth year. This article walks through the current RMD rules in general terms, then looks at the strategies households commonly review, so you have context before working through your own numbers with a tax or financial professional. IRS figures below were reviewed as of October 12, 2026.
What Is an RMD and Why It Matters
A required minimum distribution is the smallest amount the IRS requires you to withdraw each year from certain retirement accounts once you reach your applicable age. RMDs generally apply to traditional IRAs, SEP and SIMPLE IRAs, and most employer-sponsored plans such as 401(k)s and 403(b)s. The rule exists because these accounts were funded with pre-tax dollars that have grown tax-deferred for years or decades. The IRS designed RMDs to eventually bring that money into taxable income, rather than allowing it to grow tax-deferred indefinitely.
Roth IRAs are a notable exception: they are not subject to RMDs during the original owner's lifetime, since Roth contributions are already taxed and the account is not treated the same way under the tax code. Designated Roth accounts inside 401(k) plans were also brought into line with this treatment in recent years. Inherited accounts, whether traditional or Roth, follow a different and more complex set of distribution rules that are not covered in this article.
Current RMD Age Rules (SECURE Act 2.0 Changes)
The SECURE Act 2.0, signed into law in December 2022, raised the RMD withdrawal age in stages. As of 2026, the current framework works like this:
- Born 1950 or earlier: RMD age 72 (under prior law)
- Born 1951 to 1959: RMD age 73
- Born 1960 or later: RMD age 75
The age-75 threshold phases in fully by 2033, so the practical effect for 2026 is that most people currently reaching their RMD age are using the age-73 rule. If you were born in 1960 or later, your applicable age is 75, though the earliest that group actually reaches age 75 is several years out.
Timing matters as much as the age itself. Your very first RMD can be delayed until April 1 of the year after you reach your applicable age, a date the IRS calls your "required beginning date." Every RMD after that first one must be taken by December 31 of each year. Delaying the first RMD into the following April can mean taking two RMDs in the same calendar year, which is worth thinking through before you decide to wait (more on that below).
These are general federal rules under current IRS guidance, and the specific date that applies to you depends on your exact birth date and account types. This article is not personalized tax advice, and confirming your own required beginning date with a tax professional is a reasonable step before your first RMD year.
How to Calculate Your RMD
Most people calculate their RMD using the IRS Uniform Lifetime Table, found in IRS Publication 590-B. The basic formula is:
Account balance as of December 31 of the prior year, divided by the life expectancy factor for your age from the applicable IRS table.
As a simple, hypothetical illustration: suppose a 75-year-old retiree had a traditional IRA balance of $500,000 on December 31 of the prior year, and the Uniform Lifetime Table factor for age 75 were 24.6. Dividing $500,000 by 24.6 produces an RMD of approximately $20,325 for that year. This example is illustrative only. Your own factor and balance will differ, and the table itself is periodically updated by the IRS.
Not everyone uses the Uniform Lifetime Table. A Joint Life and Last Survivor Table applies in certain cases where a spouse is more than 10 years younger and is the sole beneficiary, and a Single Life Table applies to certain beneficiaries of inherited accounts. Which table applies to your situation depends on your account type, marital status, and beneficiary designations, so this is another area where reviewing IRS Publication 590-B or speaking with a tax professional can help confirm you are using the correct factor.
Penalties for Missed Distributions
Missing an RMD, or withdrawing less than the required amount, triggers an excise tax on the shortfall. Historically, that penalty stood at a steep 50 percent of the amount that should have been withdrawn. The SECURE Act 2.0 reduced the base penalty to 25 percent, and it can drop further to 10 percent if the shortfall is corrected within the IRS's correction window.
If you discover a missed or shortfall RMD, the general process involves filing IRS Form 5329, taking the missed distribution as soon as reasonably possible, and, in appropriate cases, requesting a waiver of the penalty for reasonable cause. The IRS reviews waiver requests case by case, and there is no guarantee a waiver will be granted. Because the correction window, the waiver process, and the interaction with your other income for the year can each affect the outcome, working with a tax professional on a missed RMD is generally a wise step rather than an optional one.
Required Minimum Distribution Strategies: QCDs, Roth Conversions, and Timing
A few approaches may help pre-retirees and retirees manage the tax impact of RMDs. None of them guarantees a particular result, each comes with its own limits, and none suits every household.
Qualified Charitable Distributions (QCDs)
Once you reach age 70½, you may be able to direct funds from an IRA to a qualified charity through a QCD. For 2026, the IRS annual QCD limit is $111,000 per individual, up from $108,000 in 2025, because the limit is indexed for inflation (IRS Notice 2025-67, as of October 12, 2026). A QCD can count toward satisfying your RMD without adding the donated amount to your taxable income.
The limits matter. The money must go directly from the IRA trustee to the charity rather than passing through your hands, QCDs are generally made from IRAs rather than workplace plans such as 401(k)s, and a QCD amount generally cannot also be claimed as a charitable deduction (IRS Publication 590-B). A QCD only reduces taxable income to the extent the gift is made, and it is not available before age 70½.
Roth Conversions Before RMD Age
Converting traditional IRA or 401(k) funds to a Roth IRA before you reach RMD age may reduce the balance that future RMDs are calculated on, since Roth IRAs carry no RMDs during the original owner's lifetime (IRS: Required minimum distributions, as of October 12, 2026). Some households look at the years between retirement and RMD age as a window to consider this, and our article on Roth conversions before RMDs begin covers the timing question in more depth.
The trade-off is that the converted amount is generally taxable as ordinary income in the year of the conversion. That can be substantial depending on the amount converted and your other income, and it may also affect Medicare premiums and how much of your Social Security benefit is taxed. Whether a conversion makes sense, and how large it should be, depends on your tax bracket, time horizon, and overall financial picture, and results vary from household to household.
Timing of Your First RMD
Your first RMD can be delayed until April 1 of the year after you reach your applicable age. Waiting can be useful, but it generally means two RMDs land in the same calendar year: the delayed first one by April 1 and the second one by December 31. The IRS notes that taking the first RMD by December 31 of the year you reach your applicable age instead would allow the distributions to be included in income in separate tax years (IRS: Required minimum distributions, as of October 12, 2026).
As a hypothetical illustration only, suppose a first-year RMD of $20,000 and a second-year RMD of $21,000. Delaying the first one into April would put $41,000 of RMD income on one tax return, while taking it in the first year would split the same distributions across two returns. Whether splitting them helps depends on your other income, deductions, and bracket, so this example is not a recommendation for any household.
Can an RMD Be Converted to a Roth?
Generally, no. IRS guidance states that RMD amounts cannot be rolled over into another tax-deferred account (IRS RMD FAQs, as of October 12, 2026), and IRS Publication 590-A explains that amounts required to be distributed from a traditional IRA for a year cannot be converted (IRS Publication 590-A). The first dollars withdrawn from an IRA in a year are treated as the RMD, so the RMD generally needs to be taken first. That distribution is taxable income, not a conversion.
Amounts above the RMD may be eligible for a Roth conversion in the same year, and those converted dollars are generally taxable in the year of the conversion. In practice, this means a household that wants to convert in an RMD year may face the RMD tax and the conversion tax together. Because the order of withdrawals, the tax result, and the account types involved can all change the outcome, this is a question to review with a tax professional before acting.
Still Working Past RMD Age: A Note for Faculty and Hospital Staff
Employer plans have a different rule from IRAs. According to the IRS, participants in a workplace plan such as a 401(k) or 403(b) may be able to delay RMDs from that plan until the year they retire, unless they are a 5% owner of the business sponsoring the plan, and the plan document governs whether the delay is allowed. The delay does not apply to traditional, SEP, or SIMPLE IRAs, which require RMDs at the applicable age even if you are still working (IRS RMD FAQs, as of October 12, 2026).
For university faculty and administrators and hospital employees, this may mean different accounts follow different timelines, including older rollover IRAs held alongside a current employer plan. Separately tracked pre-1987 403(b) amounts follow their own rules as well. Plan terms vary, so confirm the details with your plan administrator and a tax professional, and see our overview of 401(k) and retirement plan management for how workplace plan decisions connect to the rest of a plan.
How a Local Fiduciary Advisor Can Help
RMD rules intersect with tax brackets, Medicare premiums, Social Security taxation, and charitable goals all at once, which is why they rarely have a one-size-fits-all answer. As a fee-only fiduciary advisor based in the Lehigh Valley, Wealthcare of the Lehigh Valley works with pre-retirees and retirees to project upcoming RMDs, evaluate whether strategies like QCDs or Roth conversions may fit their situation, and coordinate distribution timing with the rest of their retirement income plan. Because we are compensated only by our clients and do not earn commissions on products, our recommendations are built around your full financial picture rather than any single strategy being presented as the right answer for everyone.
We work closely with the pre-retirees, retirees, medical professionals, and higher-education faculty and administrators we serve across Allentown, Bethlehem, Easton, and the broader Lehigh Valley to build retirement income and distribution strategies around each household's account mix, tax situation, and goals.
If you are approaching your own RMD age, or want a second look at how your distributions fit into your broader plan, we would welcome the conversation. Working with a Lehigh Valley financial advisor can help you build a withdrawal strategy tailored to your situation. You can schedule a consultation with our team to get started.
Next step for households across the region
RMD decisions connect to retirement income, tax planning, and legacy goals at once. You may want to read how withdrawals fit into a broader retirement income plan, explore our income planning, tax planning, and estate and legacy planning services, or browse our helpful resources. Confirm tax treatment with a qualified tax professional before you take or change a distribution.
Frequently Asked Questions
What are common required minimum distribution strategies?
Common required minimum distribution strategies include qualified charitable distributions, Roth conversions before RMD age, and coordinating the timing of the first RMD with other income. Each may change a household's taxable income, but each has limits, including age and eligibility rules, taxable conversion income, and the possibility of two distributions landing in one tax year. Which, if any, fits depends on individual circumstances.
Can a required minimum distribution be converted to a Roth IRA?
Generally, no. IRS guidance says an RMD cannot be rolled over or converted, and the first dollars withdrawn in a year are treated as the RMD. The RMD must be taken first and is taxable income. Amounts above the RMD may be eligible for a Roth conversion, which is also generally taxable in the year of the conversion.
What is the current RMD age?
Under the SECURE Act 2.0, the required beginning age is 73 for people born from 1951 through 1959. For those born in 1960 or later, the applicable age rises to 75, a change that phases in fully by 2033. The specific date your first RMD is due depends on your birth year and the calendar year you reach your applicable age.
What happens if I miss my RMD?
The SECURE Act 2.0 reduced the excise tax on a missed RMD from 50 percent of the shortfall to 25 percent, and the rate can drop further to 10 percent if the shortfall is corrected within the IRS's correction window. Missed distributions are generally reported on Form 5329, and the IRS may waive the tax for reasonable cause. Because the rules and correction steps are detailed, this is a good area to review with a tax professional.
Can I avoid RMDs with a Roth IRA?
Roth IRAs are not subject to RMDs during the original owner's lifetime, which is one reason some retirees consider Roth conversions before their RMD age. Converting traditional retirement funds to a Roth generally triggers taxable income in the year of conversion, so whether it makes sense depends on your individual tax situation and time horizon.
How are RMDs taxed?
Distributions from traditional IRAs, 401(k)s, and similar pre-tax accounts are generally taxed as ordinary income in the year they are withdrawn, whether taken as an RMD or otherwise. Qualified charitable distributions sent directly to charity are a notable exception, since the amount can be excluded from taxable income up to the annual QCD limit. A tax professional can help you understand how a given year's RMD affects your specific return.
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