RMD Planning in Arizona: A Calendar and Decision Flow

Under SECURE 2.0, the age when required minimum distributions (RMDs) begin depends on your birth year. If you were born from 1951 to 1959, RMDs begin at age 73. If you were born in 1960 or later, they begin at age 75. If you were born in 1950 or earlier, distributions are already required each year.

The first RMD is due by April 1 of the year after you reach your start age. Every later RMD is due by December 31 of that year. That creates the double distribution trap: if you wait until April 1 for the first one, you owe a second RMD by December 31 of the same year, and both land on one tax return. For a person who turns 73 in 2026, the first RMD (based on the December 31, 2025 balance) is due by April 1, 2027, and the 2027 RMD is due by December 31, 2027. Two RMDs in the 2027 tax year can push income into a higher bracket than taking the first one in 2026.

Delaying the first RMD into the next year is allowed. Whether it makes sense depends on the household's other 2026 and 2027 income, which is why it belongs on a calendar rather than being decided in March.

Most account owners use the Uniform Lifetime Table in IRS Publication 590-B. The RMD is the account balance on December 31 of the prior year divided by the distribution period for the age you reach this year. The divisor is 26.5 at age 73, 20.2 at age 80 and 16.0 at age 85. A $1,800,000 traditional IRA balance on December 31, 2025 divided by 26.5 gives a 2026 RMD of about $67,925.

Owners whose sole beneficiary is a spouse more than 10 years younger use the Joint Life and Last Survivor table (Table II), which produces a longer divisor and a smaller RMD.

Aggregation rules decide where the money can come from. All of your traditional IRAs (including SEP and SIMPLE IRAs) are treated together: calculate each RMD, add them up, and take the total from any one or more of them. A 401(k) is calculated and satisfied plan by plan. 403(b) accounts can be combined with other 403(b) accounts but not with IRAs. An IRA RMD cannot satisfy a 401(k) RMD, and the reverse is also true. Inherited accounts follow separate rules.

The full mechanics, including worked examples, are in the long guide linked below. This page is about the sequence of decisions around the math.

Under SECURE 2.0, the excise tax on an RMD that was not taken is 25% of the shortfall for 2026, down from 50% before 2023. The rate drops to 10% if the shortfall is corrected within the correction window, generally by the end of the second year after the year it was missed, or earlier if the IRS issues a notice of deficiency or assesses the tax. On the $67,925 first RMD in the example below, a full miss would mean a 25% tax of about $16,981, or about $6,793 at the 10% rate.

The tax is reported on Form 5329, and the IRS can waive it for reasonable cause when the shortfall is corrected and a waiver is requested. A waiver is not automatic, so building the deadline into a calendar is cheaper than relying on one.

For tax year 2026, Arizona has a flat 2.5% individual income tax. An RMD from a traditional IRA or pre-tax 401(k) is ordinary income, so it is taxed at 2.5% in Arizona and at your ordinary federal rate. Social Security benefits are fully exempt from Arizona tax, and Arizona has no estate or inheritance tax. This page assumes Arizona's 2026 standard deduction matches the federal $32,200 for married filing jointly and $16,100 for single filers; confirm in the 2026 Form 140 instructions.

Because the Arizona rate is flat, the state portion of RMD planning is predictable. The federal side is where bracket position, Social Security taxation and Medicare premiums respond to the size of the RMD.

Distributions are not always taxed as they are paid. Federal withholding on an IRA distribution defaults to 10% for 2026 unless the owner elects a different amount, and withholding from a 401(k) distribution is handled by the plan. Withholding is generally treated as paid evenly across the year, which makes a late-year withholding election a common way to cover a shortfall without quarterly estimated payments. If withholding is not used, estimated payments (Form 1040-ES federally and Form 140ES in Arizona) are due through the year.

Four rules change the picture, and each has limits.

• Qualified charitable distributions (QCDs): from age 70 and a half, a transfer sent directly from an IRA to a qualifying charity counts toward the RMD and is excluded from income. The 2026 limit is $111,000 per person. QCDs generally cannot come from a 401(k), and a distribution that passes through the owner's hands does not qualify.
• Working longer: if the owner is still working for the employer that sponsors the plan, and is not a 5% owner of that employer, the plan may allow RMDs from that employer's plan to wait until retirement. It does not apply to IRAs, to plans from former employers, or to 5% owners.
• Roth accounts: Roth IRAs have no lifetime RMD for the original owner. Since 2024, Roth 401(k) accounts also have no lifetime RMD. Rolling a Roth 401(k) to a Roth IRA is not required to avoid RMDs, though it can simplify the account list.
• Roth conversions: a conversion moves pre-tax dollars into a Roth account, which permanently shrinks the balance used to calculate later RMDs. A conversion cannot be done with the RMD itself in a year when an RMD is due. The RMD must be taken first.

The years between retirement and the first RMD are often the lowest-income years a household will have, because wages have stopped and Social Security may not have begun. That gap is when conversion and drawdown decisions have the most room.

There are two common levers. One is Roth conversions, which pay tax now at the bracket the household chooses in exchange for a smaller pre-tax balance later. The other is drawing down pre-tax accounts early by spending from them before taking Social Security or other income, rather than leaving them untouched until the RMD forces the issue. Both levers raise taxable income in the years they are used, so they trade a higher tax bill now for a lower one later. That trade is not always favorable, and the example below shows a case where total tax through age 85 was higher with conversions.

Three interactions are worth checking before any conversion or large distribution. First, Social Security taxation: the provisional income thresholds ($32,000 and $44,000 for married filing jointly in 2026) are not indexed, so RMD income can make up to 85% of benefits taxable. Second, IRMAA: 2026 Medicare premiums are based on 2024 income, and the first surcharge tier for married filing jointly starts above $218,000 of MAGI, so a large RMD or conversion can raise Part B and Part D premiums two years later. Third, the 22%, 24% and 32% bracket edges for 2026: for married filing jointly, 22% runs to $211,400 and 24% to $403,550 of taxable income.

Our guides on tax planning for RMDs and on minimizing RMDs cover each lever in depth. Our pre-RMD drawdown answer covers the early-distribution question on its own.

The order of questions matters more than any single tactic. Work through them in this order each year:

• Five to ten years before the start age: Map every pre-tax account (IRAs, 401(k)s, 403(b)s). Decide whether to convert or draw down early, and set a target bracket for those years.
• The year before the start age: Confirm the start age from the birth year. Consolidate old 401(k)s into an IRA if that fits the plan, since IRAs can be aggregated. Estimate the first RMD from the December 31 balance and the Uniform Lifetime Table.
• January of each RMD year: Get December 31 balances from every custodian. Calculate each account's RMD and note which accounts can be aggregated.
• Spring: Decide whether any QCD will be made directly from the IRA. If it is the first RMD year, decide between taking it in the start-age year or by April 1 of the following year, and look at the double distribution cost.
• Mid-year: Check projected income against Social Security taxation and the IRMAA tiers. Set withholding or estimated payments.
• October to November: Confirm the RMD is on track. Complete any QCD by year end, because the check or transfer must clear before December 31.
• December: Take any remaining RMD no later than December 31. Add a note to repeat the process next January.