IRA Rollover and RMD Rules 2026: What You Must Do When You're 73 or Older

Rolling a 401(k) or 403(b) to an IRA after you've reached required minimum distribution age introduces a sequencing requirement that catches many people off guard. The IRS rule is simple but the consequences of getting it wrong are not: RMD amounts are ineligible for rollover. You must take the RMD first — and it must come from the right account. This guide explains the rules, the aggregation logic, the first-year trap, and how a fee-only advisor can help you coordinate a rollover with your RMD obligations.

What year does RMD age apply to you?

SECURE 2.0 (§ 107) changed the RMD starting age based on birth year:¹

• Born before January 1, 1951: RMD age was 70½ under original law, or 72 under the original SECURE Act. You are already well into RMD territory.
• Born January 1, 1951 – December 31, 1959: RMD age is 73. You must take your first RMD for the year you turn 73.
• Born January 1, 1960 or later: RMD age is 75. Your RMD obligation begins the year you turn 75.

These rules apply to traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k) plans, 403(b) plans, 457(b) plans, and profit-sharing plans. Roth IRAs do not have RMDs during the owner's lifetime. As of 2024, Roth 401(k) accounts are also exempt from RMDs (SECURE 2.0 § 325, effective for distributions after December 31, 2023).²

The sequence: take RMD first, then roll

If you are subject to RMDs and want to roll a 401(k), 403(b), 457(b), or TSP balance to an IRA, the sequence is non-negotiable:

1. Calculate your RMD for the year using the prior December 31 balance and the IRS Uniform Lifetime Table (IRS Pub. 590-B, updated table effective 2022 per T.D. 9930).
2. Take the RMD from the plan before initiating the rollover. The plan administrator is required by law to withhold and distribute the RMD before processing any rollover request — but confirming this explicitly avoids administrative confusion.
3. Request a direct rollover of the remaining balance to your IRA via trustee-to-trustee transfer. No withholding, no 60-day clock, no risk of a taxable event on the rollover portion.

The plan will issue two separate 1099-R forms: one for the RMD distribution (taxable, coded "7" for normal distribution) and one for the rollover amount (tax-free, coded "G" for direct rollover to a qualified plan or IRA). When you file, you'll report the RMD as ordinary income and use Form 8606 if you have any after-tax basis in the account.

Interactive RMD calculator for rollover planning

Enter your account balance (December 31 of the prior year) and your current age to see your 2026 RMD and the amount available for rollover. The calculation uses the IRS Uniform Lifetime Table (T.D. 9930, effective 2022).⁴

Aggregation rules: which accounts you can combine (and which you can't)

The aggregation rules determine whether you can satisfy multiple RMD obligations from a single account. These rules are different for IRAs and employer plans:

Traditional IRAs (including rollover IRAs and inherited IRAs)

You may aggregate your RMDs across all your own traditional IRAs. The IRS requires you to calculate each IRA's RMD separately using that account's December 31 balance, but you can satisfy the total from any one IRA or any combination. If you have four traditional IRAs totaling $1.2M with a combined RMD of $50,000, you can take the full $50,000 from a single IRA and be compliant — as long as the math adds up across all accounts.⁵

403(b) plans

Like IRAs, 403(b) plan RMDs can be aggregated and satisfied from any one 403(b) account (or any combination), as long as the total meets the combined requirement. This is the only employer-plan type that follows the IRA-style aggregation rule.

401(k), 457(b), and other qualified plans

Each employer plan must satisfy its own RMD independently. You cannot take a 401(k) RMD from an IRA, and you cannot satisfy a 401(k) RMD from a different employer's 401(k). If you have two old 401(k) plans from two former employers, each plan must distribute its own RMD before you can roll either one. There is no cross-plan aggregation.⁵

You cannot combine IRA and 401(k) RMDs

This is a frequent misunderstanding: IRA RMDs and 401(k) RMDs exist in separate silos. Taking a larger IRA distribution to "cover" a 401(k) RMD does not work — the 401(k) plan must still distribute its own RMD, and the excess IRA distribution is just ordinary income.

The first-year RMD delay trap

For your first RMD only, you have the option to defer taking it until April 1 of the year following the year you reach RMD age. For example, if you turn 73 in 2026, you can defer your first RMD to April 1, 2027.¹

The trap: if you defer your first RMD to April 1, 2027, you still owe a second RMD by December 31, 2027. You'll have two full RMDs in 2027 — both counted as ordinary income in the same tax year. For many people, especially those planning a rollover, this is the worst possible outcome:

• Two RMDs in one year push more income through the higher brackets
• The double income may trigger IRMAA surcharges if your Medicare premium period starts that year (IRMAA uses a 2-year lookback — 2027 income affects 2029 premiums)
• The double income may claw back ACA subsidies if you're under 65

If you're executing a rollover in the year you first reach RMD age, take the RMD in the same year rather than deferring. The only scenario where deferral makes sense is if you expect significantly lower income in the next year (e.g., you're retiring mid-year 2026 and expect much lower 2027 income even with two RMDs).

What happens to RMDs after the rollover

Once you've rolled your 401(k) into a traditional IRA, the IRA balance is now subject to IRA RMD rules — starting with the December 31 balance of the year in which the rollover completed. This is actually beneficial compared to 401(k) aggregation rules because:

• Your new IRA balance joins your existing IRA pool for aggregation purposes. You can take all your IRA RMDs from whatever account is most convenient.
• You gain more flexibility over which assets to liquidate for the RMD (in a 401(k) you're often limited to plan options; in an IRA you can choose).
• If you want to do a Roth conversion alongside your RMD, IRA rules allow you to convert freely after taking the RMD — which is more flexible than most 401(k) plans allow.

The rollover does not reset your RMD age or give you a grace period. If you complete a rollover in December 2026, the new IRA's December 31, 2026 balance is used to calculate its 2027 RMD due December 31, 2027.

The QCD opportunity: reduce your RMD tax hit

If you are age 70½ or older, a Qualified Charitable Distribution (QCD) allows you to direct up to $111,000 per year (2026, indexed for inflation) from a traditional or rollover IRA directly to a qualified charity — and have it count toward your RMD while excluding the amount from your gross income entirely.⁶

A QCD is often more tax-efficient than taking the RMD as income and then making a charitable deduction, because:

• The QCD is excluded from gross income — it never appears as income on your return at all. A regular charitable deduction only reduces taxable income if you itemize, and most retirees now take the standard deduction.
• Lower AGI from a QCD reduces exposure to IRMAA surcharges (Medicare), reduces the threshold for taxation of Social Security benefits, and reduces exposure to the NIIT (net investment income tax) threshold.
• QCDs can satisfy part or all of your RMD, reducing the ordinary income you'd otherwise owe.

A QCD is only available from an IRA — not from a 401(k) or other employer plan. If your RMD-year goal includes charitable giving, rolling the 401(k) to an IRA first (and then making QCDs from the IRA in subsequent years) gives you the most flexibility. Note that you cannot QCD and then do a Roth conversion in the same year and have the QCD reduce the conversion's tax basis — they're separate transactions.

RMD penalty: what happens if you miss it

The excise tax for failing to take a required minimum distribution is 25% of the shortfall — the amount you should have taken but didn't. SECURE 2.0 reduced this from 50% (the prior rate).⁷

The penalty drops to 10% if you correct the shortfall within the correction window: take the missed RMD and file Form 5329 with the corrected return within the tax filing deadline (including extensions) for the year in which the correction occurs.⁷ This gives you a meaningful window to fix an error without paying the full penalty.

If you believe you missed an RMD and want to seek a penalty waiver from the IRS, you can request a waiver on Form 5329 by explaining the error was due to "reasonable cause." The IRS has discretion to waive the penalty — more likely if the RMD is taken promptly and it was a one-time administrative error.

Common mistakes in an RMD year rollover

Mistake 1: Initiating the rollover before taking the RMD

The plan administrator is required to withhold the RMD before processing the rollover, so this is often caught — but if the plan releases the full balance as a rollover without withholding the RMD, you've received an excess rollover contribution to the IRA. The excess contribution triggers a 6% annual excise tax (Form 5329) and the RMD is still owed as taxable income. Fix it by withdrawing the excess from the IRA before the tax filing deadline.

Mistake 2: Thinking the 401(k) RMD can come from your IRA

It cannot. Each employer plan's RMD must come from that plan. If you have a 401(k) at a former employer and a rollover IRA, taking a larger IRA distribution does not satisfy the 401(k) plan's RMD. The 401(k) must distribute its own RMD regardless of what you take from the IRA.

Mistake 3: Deferring the first RMD and rolling over the same year

If you're in your first RMD year and defer taking the RMD to April 1 of the next year, but also roll the 401(k) to an IRA before year-end, the sequence gets complicated. The RMD was calculated based on the old plan's December 31 balance — and it's still owed, even though the account has moved. Your new IRA custodian needs to know about the pending obligation. This is an area where an advisor earns their fee.

Mistake 4: Rolling a Roth 401(k) without realizing RMDs are gone

Roth 401(k)s had RMDs until 2024, which was a major downside vs. Roth IRAs (which have no lifetime RMDs). SECURE 2.0 § 325 eliminated Roth 401(k) RMDs starting January 1, 2024. If you rolled a Roth 401(k) to a Roth IRA specifically to avoid RMDs, you made the right call — but also understand that the Roth 401(k) RMD issue is now gone for anyone still holding one.² The 5-year clock issue on rollover is separate — see our Roth 401(k) to Roth IRA rollover guide.

Mistake 5: Forgetting the new IRA will itself have an RMD next year

If you complete a rollover in 2026, the IRA's December 31, 2026 balance (which now includes the rolled-over funds) drives your 2027 IRA RMD. Plan for this in your withdrawal strategy. If you already hold other traditional IRAs, your combined IRA balance — including the new rollover IRA — determines the 2027 RMD amount that you can satisfy from any combination of those IRAs.

Coordinating your rollover with Roth conversion strategy

Many people in their early-to-mid 70s combine a rollover year with a Roth conversion strategy — using the low-income years between retirement and Social Security or RMD onset to move pre-tax money to Roth. Once RMDs begin, you cannot convert the RMD portion itself (RMDs are not eligible rollover distributions), but you can:

• Take the RMD first (mandatory), then convert additional IRA funds to Roth in the same year — the conversion is added to your ordinary income for that year
• Use a QCD to satisfy part of the RMD with zero taxable income, then convert additional funds to Roth up to whatever bracket ceiling you're targeting
• If your IRA is in an employer plan (401(k)), roll it to an IRA first, take the RMD from the IRA, and then do Roth conversions from the IRA going forward

The IRMAA threshold ($106,000 single / $212,000 MFJ for 2026⁸) is a common ceiling for conversion planning. Pushing income above the first IRMAA tier triggers a $740–$2,100 Medicare premium surcharge annually — a cliff worth managing carefully around a rollover year that may already push income higher than usual.