What Are Required Minimum Distributions?

Required Minimum Distributions (RMDs) are annual withdrawals the IRS requires from most pre-tax retirement accounts starting at age 73. They apply to traditional IRAs, SEP and SIMPLE IRAs, 401(k)s, 403(b)s, and 457(b) plans, among others. Roth IRAs are not subject to RMDs during the original owner's lifetime.

The amount each year is calculated by dividing the prior year-end balance of the account by a distribution period from the IRS Uniform Lifetime Table. The distribution period shrinks each year, which means the percentage taken out grows over time, whether or not the account balance grows.

Why RMDs Almost Always Increase IRMAA

Every dollar of RMD is fully taxable as ordinary income. There is no deduction for the RMD, no exclusion, and no way to return the money to the account once distributed (outside of limited rollover scenarios). The distribution flows straight into AGI, and from AGI into MAGI.

Retirees who spent decades building traditional IRA and 401(k) balances often find that the RMD alone is enough to push them over an IRMAA threshold, even without other income sources like Social Security, pensions, or investment income. Stacked on top of those sources, the combined MAGI often lands several tiers above the standard premium level.

Example: A single retiree at age 73 has $800,000 in a traditional IRA at the end of the prior year. The Uniform Lifetime Table distribution period at 73 is 26.5. The first RMD is approximately $800,000 divided by 26.5, which equals roughly $30,189.

If the retiree also receives $35,000 in Social Security (of which approximately $29,750 is taxable), $20,000 in pension income, and $15,000 in investment income, total MAGI is approximately $94,939. That amount is still below the single Tier 1 threshold of $109,000.01, so no IRMAA applies in the first RMD year.

Ten years later, the IRA balance has grown, the distribution period has shrunk to about 18.7, and the RMD percentage has climbed. The same retiree may now draw $55,000 or more from the IRA alone, with Social Security and other income also adjusted for COLA. Total MAGI can easily cross $109,000.01, triggering IRMAA on top of the higher ordinary income tax bill.

The RMD Growth Curve: Why Year 10 Hurts More Than Year 1

The percentage of the prior year-end balance required to be distributed rises each year. At age 73, the percentage is roughly 3.77%. By 80 it is approximately 4.95%. By 90 it is approximately 8.20%. By 95 it is over 12%. For a retiree who started with a meaningful pre-tax balance, the trajectory is steep.

The combined effect of rising RMD percentages and ongoing investment growth means that IRMAA exposure tends to get worse with age, not better. This is the opposite of the planning assumption many retirees make when they think "my income will drop in retirement."

The QCD Solution (Age 70 and a Half or Older)

A Qualified Charitable Distribution (QCD) allows IRA owners 70 and a half or older to send money directly from the IRA to a qualifying charity. In 2026, the limit is $108,000 per person. The QCD counts toward the RMD for the year, but the distributed amount is not included in taxable income and is not added to MAGI.

For charitably inclined retirees, QCDs are one of the most effective tools for managing both tax liability and IRMAA exposure. A retiree already giving $15,000 per year to charity may be able to redirect that giving through a QCD and reduce MAGI by the same amount, with direct consequences for IRMAA two years later.

Key QCD rules to verify with a tax professional:

Pre-73 Roth Conversions: The Best Long-Term RMD Shield

The most powerful RMD-driven IRMAA strategy is to reduce the pre-tax balance before RMDs begin. Roth conversions do exactly that. The conversion moves assets from a traditional IRA or 401(k) into a Roth IRA. Tax is owed on the converted amount in the conversion year, but the account balance is permanently removed from the base subject to future RMDs.

The optimal Roth conversion window is often considered to be ages 60 through 63, after most earned income has stopped but before Medicare enrollment and the two-year lookback begin to matter. Conversions in that window reduce both future RMDs and the IRMAA exposure those RMDs create.

For filers already 73 or older, partial Roth conversions may still help, though each conversion adds to MAGI in the conversion year and the IRMAA math becomes more delicate. Depending on your situation, modeling the tradeoff carefully is important.

Coordinating RMDs Across Multiple Accounts

The rules for aggregating and satisfying RMDs vary by account type:

Understanding which accounts allow aggregation helps retirees sequence withdrawals to manage tax efficiency and reduce IRMAA exposure over time.

What Happens If You Miss an RMD

A missed RMD historically triggered a 50% excise tax on the amount that should have been distributed. Under recent legislation, the excise tax is reduced to 25%, and reduced further to 10% if corrected within the applicable correction window. The account owner also owes ordinary income tax on the eventual distribution.

The IRS may waive the excise tax if the shortfall was due to reasonable error and the account owner takes corrective action. This typically involves filing Form 5329 and a statement explaining the circumstances. Consult a licensed financial advisor or tax professional for personalized planning guidance.

Steps to Consider Before Age 73

The strategies that work must be in place two years before you enroll, and for RMD planning, the real horizon is longer still. Decisions made in the early 60s shape the RMD curve that drives IRMAA in the 70s and 80s. Clarity before the penalty starts with understanding that curve.

See Where You Stand

Our IRMAA Report estimates your projected surcharge exposure based on your income and filing status, including the MAGI impact of projected RMDs against the 2026 bracket thresholds.

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