WEALTH PARTNERS
Financial Planning · September 29, 2026
Missed an RMD? The Penalty Isn’t What It Used to Be
The rules around required minimum distributions have changed more than most people realize, and the penalty for getting one wrong has gotten far less severe.
Required minimum distributions, the amounts the IRS requires to be withdrawn each year from most tax-deferred retirement accounts, used to carry one of the harshest penalties in the tax code: miss one, and the shortfall was taxed at 50%. Under the SECURE 2.0 Act, that penalty has been reduced substantially, though missing an RMD is still worth avoiding, not courting.
The current rules: the age RMDs must begin is now 73, and it is scheduled to move to 75 in 2033. If an RMD is missed or underpaid, the standard penalty is now 25% of the shortfall, and that penalty can drop further, to 10%, if the mistake is corrected within the IRS correction window, which generally runs about two years.
Where people get tripped up
One place people get tripped up is the first year RMDs are required. The deadline for that very first distribution can be pushed to April 1 of the following year. That flexibility has a catch: the second year’s RMD is still due by December 31 of that same year. Delay the first one, and two distributions land in a single tax year, which can push income into a higher bracket and affect Medicare premiums.
Other common misses are quieter. Several IRAs can generally be combined into one withdrawal, but 401(k) accounts usually cannot; each plan typically needs its own. Inherited accounts follow their own rules entirely, and those rules have shifted more than once in recent years.
An RMD mistake is rarely a disaster anymore. It is still a cost that a little planning avoids.
If one was missed
The fix is usually straightforward: take the missed amount as soon as it is discovered, then report it on IRS Form 5329 with that year’s return. The IRS can also waive the penalty entirely when the shortfall came from a reasonable error and is being corrected, and that request is made on the same form. Acting quickly is what keeps the cost at the lower end, or at zero.
The Numbers Behind the Rule
Sources: SECURE 2.0 Act of 2022, Sections 107 and 302; IRS, Retirement Plan and IRA Required Minimum Distributions FAQs. Rules are summarized as of the date shown and may change.
How We Approach It
We track RMD deadlines for the accounts we manage and build each year’s distribution into your income and tax picture ahead of time, so the withdrawal is a planned event rather than a December scramble.
The penalty change is real good news, but the better news is that most RMD mistakes never have to happen. A clear calendar, a coordinated plan across accounts, and a quick look each fall are usually all it takes.
