Deorbit Plan

RMDs, inheritance & giving

Required minimum distributions, giving from an IRA, and what heirs face when they inherit retirement accounts.

By the Deorbit Plan editorial team, a Berrydyne program · Last reviewed · 8 guides

RMDs, inheritance & giving: the overview

Money in a traditional IRA or 401(k) has never been taxed, and the law does not let it stay that way forever. Required minimum distributions (RMDs) force a withdrawal every year once you reach the starting age, and when the account passes to an heir, a second set of rules decides how quickly the heir must take it out. Roth IRAs are the exception on the owner’s side: they have no RMDs while the owner is alive[1].

The decisions

  • Planning for the starting age. RMDs begin at 73 for people born 1951–1959 and at 75 for people born in 1960 or later[1]. Each year’s RMD is the prior year-end balance divided by the Uniform Lifetime Table factor for your age[2]: 26.5 at 73, 24.6 at 75, 16 at 85. That is 3.8%, 4.1% and 6.3% of the balance, so the forced share rises with age even if the balance does not. Missing an RMD can cost a 25% excise tax on the shortfall, cut to 10% if it is corrected in time[1]. The years before RMDs start are when Roth conversions can shrink the balance that RMDs will later be figured on.
  • Giving from the IRA. From age 70½ an IRA owner can send money directly to charity as a qualified charitable distribution (QCD), up to $111,000 per person in 2026[3][4]. The QCD is not counted in income, and for owners old enough to have an RMD it counts toward that year’s RMD[3].
  • What heirs face. Most non-spouse beneficiaries must empty an inherited account within 10 years[5], and every pre-tax dollar they take out is income to them. A surviving spouse, the owner’s minor child, a disabled or chronically ill beneficiary, and someone not more than 10 years younger than the owner are “eligible designated beneficiaries” with more options[5].
  • Giving while alive, or at death. In 2026 you can give $19,000 to each person without using any of your lifetime exemption[7], and the federal estate and gift exemption is $15,000,000 per person[6]. The more common question is which assets to give now and which to leave, since the income tax heirs owe differs by account type.

What to read, in order

Start with the RMD bomb on how pre-tax balances turn into forced income, then the 10-year rule on what heirs must do. RMD exceptions covers the cases that change the rules (still working, Roth 401(k)s, aggregation), and giving tax-efficiently compares QCDs with donor-advised funds and gifts of appreciated shares. QLACs covers longevity annuities bought inside an IRA. For estate planning, read estate and gift tax basics and the case for early inheritance. To look up a divisor or estimate an RMD, use the RMD table and calculator. Large RMDs also raise the income Medicare uses for its surcharge; see the IRMAA lookback.

Start here

Go deeper

Reference tables

Calculators

  • RMD calculator: Enter a birth year and balance to see the required minimum distribution and the IRS divisor behind it.

See it in your plan

Load a demo plan with a large pre-tax balance and watch required distributions grow through the 80s. Try it in the simulator →

If you already have a saved plan, the link only takes you to the right panel; your plan is not changed.

This page explains how the rules work. It is not financial, tax or investment advice. Read the disclaimer.

References