RMD Basics: What You Must Withdraw Starting at 73
By WealthyDesis Team · August 6, 2026
A Required Minimum Distribution (RMD) is the minimum amount the IRS forces you to withdraw each year from a traditional 401(k), traditional IRA, SEP IRA, or SIMPLE IRA once you hit a specific age, currently 73 for most people approaching retirement now. Skip it, and the penalty is steep: a 25% excise tax on whatever you should have taken out.
For H1B and green card holders who’ve spent a career contributing to 401(k)s and IRAs, RMDs eventually apply the same way they do to anyone else. The account doesn’t know or care about your visa history. What’s different is what happens if you’ve since moved back to India, and that’s exactly where a lot of the generic RMD content online quietly stops being useful.
When RMDs Actually Start
The RMD start age depends on your birth year, not a flat rule:
- Born 1951–1959: RMDs start at age 73.
- Born 1960 or later: RMDs start at age 75.
This age has shifted twice in the last few years. It was 70½ before 2020, moved to 72 under the first SECURE Act, then to 73 (with a future step to 75) under SECURE 2.0. If you’re reading a blog post or forum thread that mentions 70½ or a flat 72, it predates the current rule, and the numbers in it can’t be trusted.
You do get one piece of flexibility: your very first RMD can be delayed until April 1 of the year after you reach your RMD age, instead of by December 31 of the year you turn it. Every RMD after that is due by December 31.
How the Withdrawal Amount Is Calculated
The formula itself is simple. It’s usually just presented without a real number attached, which is what makes it feel more complicated than it is:
RMD = Account balance on December 31 of the prior year ÷ IRS life expectancy factor for your age
The life expectancy factor comes from the IRS Uniform Lifetime Table in Publication 590-B. A few reference points:
| Age | Divisor |
|---|---|
| 73 | 26.5 |
| 74 | 25.5 |
| 75 | 24.6 |
| 76 | 23.7 |
Worked example: say your traditional IRA balance was $500,000 on December 31 of last year, and you turn 75 this year.
$500,000 ÷ 24.6 = $20,325.20
That’s the minimum you must withdraw this year. You can take out more if you want, since the IRS only sets a floor, not a ceiling, but withdrawing less than $20,325.20 triggers the penalty on the shortfall.
Use the calculator below to run your own balance and age instead of doing the division by hand.
RMD Calculator
Estimate your Required Minimum Distribution for this year. Uses the IRS Uniform Lifetime Table (post-2022 version) — accurate for most account owners; a different table applies if your spouse is the sole beneficiary and more than 10 years younger.
Educational estimate, not tax advice. RMD age is 73 for most people turning 73 between 2023-2032 (rising to 75 after). If this account is an inherited IRA, different rules apply — see the RMD basics guide.
The Two-RMD Trap in Your First Year
The April 1 delay option sounds like a benefit, and it can be, but it has a specific consequence people don’t see coming: if you delay your first RMD to April 1, your second RMD is still due by December 31 of that same calendar year. That means two full distributions, both taxed as ordinary income, land in one tax year.
For someone whose income already sits near a bracket line, or whose Medicare premiums are tied to income (IRMAA surcharges), stacking two distributions in one year can push total taxable income high enough that it costs more in tax and Medicare surcharges combined than simply taking the first RMD on time would have.
What Changed for Roth Accounts
Roth IRAs have never had RMDs for the original owner; that part hasn’t changed. What did change: starting in 2024, under SECURE 2.0, Roth 401(k) and Roth 403(b) accounts are also exempt from RMDs during your lifetime. Before 2024, Roth balances sitting inside an employer plan were still subject to RMDs even though Roth IRAs weren’t, a common point of confusion at the time. If you’re consolidating old 401(k)s and deciding whether to roll a Roth 401(k) into a Roth IRA, this is one less reason to bother, since the RMD exemption now applies either way.
If You’ve Moved Back to India
This is where RMDs stop being a US-only topic. If you built up a 401(k) or IRA during your H1B or green card years and have since returned to India, the RMD deadline and the 25% penalty for missing it don’t change, regardless of your status — being an NRI or holding OCI status under Indian law has no bearing on this at all.
But your US tax residency status is the thing that actually determines withholding, and that’s a separate question from where you live. “NRI” and “OCI” are Indian-law concepts with no US tax meaning. If you’re a green card holder who hasn’t formally relinquished it (Form I-407), you generally remain a full US tax resident taxed the same way as someone living in the US — you file a W-9, not a W-8BEN, and the nonresident-alien withholding and treaty discussion below doesn’t apply to you. It applies once you’re a true nonresident alien: either you never held a green card and fail the Substantial Presence Test, you formally gave the green card up, or — a narrower, deliberate exception under IRS Publication 519 — you’re a dual resident under Indian law who elects nonresident treatment via the treaty’s tie-breaker provision (Form 1040-NR plus Form 8833), which carries its own filing requirements and can trigger the Section 877A expatriation tax for a long-term resident. That election is a specific step with a cross-border tax preparer, not something to assume applies.
What changes for an actual nonresident alien is withholding and logistics:
- Default withholding jumps. US custodians typically withhold at a flat 30% on distributions to a confirmed nonresident alien unless you’ve filed a current Form W-8BEN claiming a reduced rate under the US-India tax treaty. (A green card holder who hasn’t relinquished the card stays on standard US resident withholding instead — this doesn’t apply to you.)
- Custodians need a foreign address on file. Some brokerages restrict account access or flag accounts for review once they learn you’re living abroad, which can complicate taking the distribution on time in the first place.
- You still need a US bank account or transfer method to actually receive the RMD, since many custodians won’t wire directly to an Indian account without prior setup.
- It counts as foreign income in India too. RMDs typically need to be reported as foreign income on your Indian tax return, and if you’re a resident and ordinarily resident (ROR), potentially disclosed as a foreign asset under Schedule FA.
None of this cancels the US-side deadline. The IRS penalty clock doesn’t pause because you’re managing a custodian’s foreign-address paperwork from Bangalore.
What happens if this is mismanaged
- Missing the April 1 first-year deadline: triggers a 25% excise tax on the amount not withdrawn — 10% if you catch and correct it within two years by filing Form 5329.
- Delaying to April 1 without planning for the second RMD: forces two distributions into one tax year, which can push you into a higher bracket and trigger Medicare IRMAA surcharges two years later.
- Assuming IRA aggregation rules apply to 401(k)s: you can combine RMDs across multiple IRAs and take the total from just one of them, but you cannot do this across multiple old 401(k)s — each employer plan’s RMD must come out of that plan.
- Assuming “NRI” or “moved back to India” means nonresident-alien tax treatment: it doesn’t — a green card holder who hasn’t formally relinquished it is still a US tax resident regardless of address, and the W-8BEN/treaty-withholding discussion doesn’t apply until you’re an actual nonresident alien.
- Not filing a W-8BEN after genuinely becoming a nonresident alien: your custodian defaults to 30% withholding on distributions instead of the lower US-India treaty rate, meaning you overpay and have to claim the difference back through your US tax return.
- Treating a Roth 401(k) like it still has RMDs: pre-2024 information will tell you to roll it into a Roth IRA to avoid RMDs — that reason no longer applies, so don’t let outdated advice drive a rollover you don’t otherwise need.
What to Do Next
Run your own numbers in the calculator above using your actual account balance and age. It’ll walk through the same division this article covered, just with your figures instead of the example. If you’re planning to move back to India before RMDs kick in, what happens to your 401(k)/IRA if you move back to India covers the account-level decision first, and it’s worth confirming your custodian can support a foreign address and getting a W-8BEN on file well before your first distribution is due, not after.
Educational estimate based on the IRS Uniform Lifetime Table — not tax advice. If you’re the beneficiary of an inherited IRA, different rules and a different table apply; consult a tax professional for your specific situation.
Frequently asked questions
At what age do RMDs actually start?
Age 73 if you were born between 1951 and 1959. Age 75 if you were born in 1960 or later. The age moved twice in recent years — first from 70½ to 72, then to 73 — so older articles and even some custodian websites still show outdated numbers.
What happens if I miss an RMD deadline?
The IRS charges a 25% excise tax on the amount you should have withdrawn but didn't. That drops to 10% if you correct the mistake within two years by taking the missed distribution and filing Form 5329.
Do Roth accounts have RMDs?
Roth IRAs never have RMDs for the original owner. As of 2024, Roth 401(k) and Roth 403(b) accounts in employer plans are also exempt during your lifetime, under the SECURE 2.0 Act — a change several older guides don't reflect yet.
I moved back to India. Do I still owe RMDs on my old 401(k) or IRA?
Yes. The IRS doesn't care where you live — the deadlines and penalties apply the same way. Withholding is the part that can change, but only if you're actually a nonresident alien for US tax purposes — which being 'NRI' or holding OCI status under Indian law does not determine. A green card holder who hasn't formally relinquished it remains a US tax resident and stays on standard withholding; true nonresident aliens often see custodians default to 30% withholding unless they've filed a valid W-8BEN claiming a treaty rate.
What's the penalty for missing a Required Minimum Distribution?
A steep 25% excise tax on whatever amount you should have withdrawn but didn't. The penalty can drop to 10% if you correct the missed distribution within a defined correction window, but it applies regardless of where you're living or your residency status.
Written by WealthyDesis Team
Reviewed for accuracy against current IRS and USCIS guidance at time of publishing.
More in Retirement & Tax-Advantaged Accounts