Everything You Need to Know About Missed RMDs

As you approach retirement age, understanding required minimum distributions (RMDs) becomes increasingly important. Most retirement plans require account holders to start withdrawing a minimum amount once they reach age 73. This amount is based on your account balance from the previous year divided by a life expectancy factor set by IRS tables.

Missing an RMD can lead to significant penalties, including an excise tax that may be as high as 25% on the amount you should have withdrawn. Fortunately, you can correct missed distributions and reduce potential penalties if you act within specific timeframes.

If you missed your RMD, here’s what you need to do to minimize or avoid penalties. 

📌 Also read: Solo 401k RMD Rules & Table (2025 Update)

When Do I Need to Take an RMD?

If your retirement account requires RMDs, the rules start once you reach age 73. For your very first RMD, you have until April 1 of the year following your 73rd birthday to take the required amount.

After that initial distribution, all future RMDs must be taken by December 31 of each year. This timing means that in the year you turn 73, you might need to withdraw twice: once by April 1 for the previous year, and again by December 31 for the current year.

What Are the Penalties for Missing an RMD Payment?

Failing to take your required minimum distribution can lead to a significant penalty. The IRS generally charges a 25% excise tax on the amount you should have withdrawn but didn’t. For example, missing a $5,000 RMD results in a $1,250 penalty.

However, this penalty can be reduced to 10% if you correct the missed RMD within the IRS’s specified correction window. 

Can the Penalty Be Waived?

Yes, under certain conditions. If you can show the missed RMD was due to a reasonable error and you took prompt action to fix the issue, the IRS may waive the penalty. To request this, you need to file Form 5329 with your federal tax return for the year in question and include an explanation of the error.

Taking these steps promptly can help minimize the impact of a missed distribution.

Steps to Take If You Missed Your RMD Payment

If you missed your required minimum distribution, you might still qualify for a waiver of the excise tax if the shortfall was caused by a reasonable error and you are taking steps to fix it. This involves filing Form 5329 along with an explanation. Here’s what you can do: 

Step 1: Withdraw the Missed RMD Amount as Soon as Possible

Once you realize you missed your RMD, your first priority should be to withdraw the shortfall — the difference between what you were required to take and what you actually withdrew. The excise tax only applies to this shortfall amount, not any earnings it may have generated.

📝 Tip: Take your missed RMD as a separate distribution. This helps keep your records organized and avoids mixing it with other withdrawals you might take that year.

Step 2: File Form 5329 for Each Year You Missed an RMD

You need to submit a separate Form 5329 for each tax year in which you missed an RMD. For example, if you missed RMDs in 2022, 2023, and 2024, you will file three separate forms — one for each year. 

You can find the current Form 5329 here.

For previous years, you can check the list of archived versions of IRS 5329 forms here. You can find download versions of Form 5329 dating back to 1975.

Step 3: Attach a Statement Explaining Your Situation

When requesting a penalty waiver, the IRS requires a written explanation along with Form 5329. There is no fixed template, but your letter should cover these key points:

Step 4: Wait for the IRS Decision and Do Not Pay the Tax Immediately

When filing Form 5329 with a waiver request, enter the code “RC” on the form and adjust the shortfall accordingly. If line 55 shows tax due, you must pay that amount along with your return. However, if the waiver is granted and reduces the tax to zero, no payment is required at that time.

If you are not requesting a waiver and are ready to pay the penalty, prepare a check or money order payable to “United States Treasury” for the tax owed. Be sure to include your Social Security number and the tax year on the check, then enclose (but do not staple) it with Form 5329 when submitting to the IRS.

How Much RMD Am I Supposed to Take?

Your RMD is calculated by taking the account balance of your retirement plan as of December 31 of last year and dividing it by your life expectancy score.

Your plan provider may help you calculate your RMD amount, but the account owner is the one responsible for ensuring the calculations are correct.

Here is a table that outlines life expectancy factors according to age:

Age	Life Expectancy Factor	Percentage of Account Balance
72	27.4	3.44%
73	26.5	3.78%
74	25.5	3.93%
75	24.6	4.07%
76	23.7	4.22%
77	22.9	4.37%
78	22	4.55%
79	21.1	4.74%
80	20.2	4.96%
81	19.4	5.16%
82	18.5	5.41%
83	17.7	5.65%
84	16.8	5.96%
85	16	6.25%
86	15.2	6.58%
87	14.4	6.95%
88	13.7	7.30%
89	12.9	7.76%
90	12.2	8.20%
91	11.5	8.70%
92	10.8	9.26%
93	10.1	9.91%
94	9.5	10.53%
95	8.9	11.24%
96	8.4	11.91%
97	7.8	12.83%
98	7.3	13.70%
99	6.8	14.71%
100	6.4	15.63%
101	6	16.67%
102	5.6	17.86%
103	5.2	19.24%
104	4.9	20.41%
105	4.6	21.74%
106	4.3	23.26%
107	4.1	24.40%
108	3.9	25.65%
109	3.7	27.03%
110	3.5	28.58%
111	3.4	29.42%
112	3.3	30.31%
113	3.1	32.26%
114	3	33.34%
115	2.9	34.49%
116	2.8	35.72%
117	2.7	37.04%
118	2.5	40.00%
119	2.3	43.48%
120+	2	50.00%

📌 Source: IRS Pub. 590-B

✏️ Hypothetical Example: Calculating Your RMD

Imagine you just turned 80, and your retirement account balance was $100,000 as of December 31 of the previous year.

To find your required minimum distribution for that year, you divide your account balance by your IRS life expectancy factor. At age 80, the factor is 20.2.

So, the calculation looks like this:
$100,000 ÷ 20.2 = $4,950.50

This means you would need to withdraw at least $4,950.50 during the year you turned 80.

If you missed this withdrawal, the IRS could charge an excise tax of 25% on the shortfall amount. In this example, that would be:
$4,950.50 × 25% = $1,237.63

If you correct the missed RMD within the IRS’s allowed timeframe, the penalty may be reduced to 10%.

Can I Withdraw More Than the RMD Amount?

Yes, you can withdraw more than your required minimum distribution if you choose. The key is to make sure you take at least the minimum amount required each year. Withdrawing extra won’t cause penalties, but it may affect your taxable income and future account balance.

Which Retirement Accounts Have Required Minimum Distributions?

RMD rules generally apply to these types of retirement accounts:

✅ Employer-sponsored plans such as 401k, 403b, and governmental 457b plans
✅ Traditional IRAs
✅ SEP IRAs
✅ SIMPLE IRAs

However, certain accounts do not require RMDs during the original owner’s lifetime:

❌ Roth IRAs
❌ Designated Roth accounts within employer plans (e.g., Roth 401k and Roth 403b)

Wrapping It Up

Required minimum distributions (RMDs) are an important part of managing your retirement accounts once you reach age 73. Missing an RMD can lead to significant penalties, but timely corrective action and proper IRS filings can significantly reduce or eliminate that penalty. 

It’s helpful to understand your withdrawal deadlines, how to calculate your RMD, and the steps to take if you miss a payment. Staying informed and organized can help you better navigate RMD rules and avoid unnecessary fees.

If you find yourself unsure about your specific situation, consulting with a financial or tax professional might provide additional guidance tailored to your needs. 

📌 For more information on retirement planning and account management, feel free to explore these articles:

---

Disclaimer:

The Carry Learning Center is operated by The Vibes Company Inc. (“Vibes”) and contains generalized educational content about personal finance topics. While Vibes provides educational content and technology services, all investment advisory services discussed on this website are provided exclusively through its wholly-owned subsidiary, Carry Advisors LLC (“Carry Advisors”), an SEC registered investment adviser. The information contained on the Carry Learning Center should not be construed as personalized investment advice and should not be considered as a solicitation to buy or sell any security or engage in a particular investment, accounting, tax or legal strategy. Vibes is not providing tax, legal, accounting, or investment advice. You should consult with qualified tax, legal, accounting, and investment professionals regarding your specific situation.

The accounts, strategies and/or investments discussed in this material may not be suitable for all investors. All investments involve the risk of loss, and past performance does not guarantee future results. Investment growth or profit is never a guarantee. All statements and opinions included on the Carry Learning Center are intended to be current as of the date of publication but are subject to change without notice.

To access investment advisory services through Carry Advisors, you must be a client of Vibes on an eligible membership plan. For more information about Carry Advisors’ investment advisory services, please see our Form [ADV Part 2A] (https://files.adviserinfo.sec.gov/IAPD/Content/Common/crd_iapd_Brochure.aspx?BRCHR_VRSN_ID=916200) brochure and [Form CRS] (https://reports.adviserinfo.sec.gov/crs/crs_323620.pdf) or through the SEC’s website at [www.adviserinfo.sec.gov] (http://www.adviserinfo.sec.gov/).