Retirees who are 73 or older and have not yet pulled their 2026 required minimum distribution have until December 31 to do it. The IRS says the amount not withdrawn may be subject to an excise tax of 25%. With the calendar at October 22, that leaves 70 days.
A required minimum distribution, or RMD, is the amount the government makes owners of traditional retirement accounts take out each year so the deferred income finally gets taxed. Missing it does not trigger a bill from a bank. It triggers one from the IRS.
What does the 25% tax cost on a missed withdrawal?
The tax applies to the shortfall, not the whole account. The IRS RMD FAQs say the amount not withdrawn may be subject to an excise tax of 25%, and 10% if the RMD is timely corrected within two years.
Take a retiree whose 2026 requirement is $10,000 and who withdraws nothing. The 25% tax would be $2,500. If that same retiree takes the missed $10,000 and corrects it inside the two-year window, the rate drops to 10%, or $1,000. Those figures are an illustration of the IRS rates, not a prediction for any one account.
Anyone 73 or older who owns a traditional IRA, SEP IRA, SIMPLE IRA or a workplace plan account now has a specific job before year-end: find out the 2026 requirement for each account, then make sure the withdrawal is completed by December 31, not merely requested. Retirees who cannot say whether the 2026 amount has already been taken should confirm it with each account’s custodian before the year-end rush.
Retirement deadlines, in your inbox: Miss an enrollment or claim deadline and the money can be gone. The Retirement Money Brief keeps you ahead of the ones that matter, every weekday.
Get the Retirement Money Brief →
We may earn a commission from links on this page.
Who has to take a 2026 withdrawal?
The IRS says withdrawals generally must start from traditional IRAs, SEP IRAs, SIMPLE IRAs and retirement plan accounts when the owner reaches age 73. After that first year, the IRS retirement topics page says, an RMD must be withdrawn by December 31 for each year.
The same page gives the penalty warning in plain terms: a 25% excise tax on the amount not distributed as required, or 10% if it is withdrawn within two years. The IRS has repeated the year-end reminder before, including in its December 2024 news release urging retirees aged 73 and older to act before the deadline.
Roth accounts are the exception. The FAQs state that the RMD rules do not apply to Roth IRAs or designated Roth accounts while the owner is alive. Money in a pre-1987 403(b) balance runs on a different clock: the IRS says it does not have to be distributed until December 31 of the year the participant turns 75.
Why does a first-year withdrawal get different treatment?
The headline exception is the first RMD. The IRS says a retiree can delay taking the first one until April 1 of the following year. For someone who turned 73 in 2026, that means the first withdrawal is not due until April 1, 2027, and no 25% tax attaches to it on December 31.
The IRS Publication 590-B frames it the same way: required distributions must begin by April 1 of the year after the owner reaches 73, and later ones must be made by December 31 of that later year. Anyone using the delay will owe two withdrawals in 2027, and that stacking can push income higher in a single tax year.
Can the penalty be waived or reduced?
Yes, in some cases. The IRS FAQs say a retiree who missed a distribution because of reasonable error can ask for a waiver by filing Form 5329 and attaching a letter of explanation. The 10% rate for a timely correction within two years is the other cushion the IRS describes.
Neither is automatic, and both come after a mistake has already happened.
The open question for every account owner 73 or older is simple and dated: has the full 2026 amount left each traditional account, and is the money in hand before the December 31 close of business?
Taken your RMD before December 31?
A miss on a 2026 withdrawal means a 25% tax on whatever was left in the account that should have come out, and a bigger withdrawal pile in the years that follow. Retirees with several accounts are the ones most likely to total the amount wrong.
The Retirement Tax & Withdrawal Planner includes four calculators (provisional income, IRMAA tier, RMD schedule, Roth bracket fill), so the RMD schedule can be worked out for each account before December 31. Part 5 of the planner covers RMDs and the Roth-conversion window.
Get the RMD schedule calculator and withdrawal planner before the 25% tax applies →
More Financial Reading
- 21 Ways to Stretch a $2,087 Social Security Check
- 15 Places to Find Your Share of the $4.25 Billion States Give Back
- The New $6,000 Senior Deduction and 14 More Tax Moves for Retirees
This article was produced with AI assistance and edited for accuracy against the sources linked above.
