RMD Distribution: How Required Minimum Distributions Work and How to Reduce Them in Bentonville, Arkansas

Introduction

This article is designed for Bentonville, Arkansas retirees and pre-retirees who want to understand how required minimum distributions (RMDs) affect their retirement planning and taxes. Required minimum distributions (RMDs) are the minimum amounts you must withdraw from your retirement accounts each year. Understanding RMDs is crucial for maximizing your retirement income, minimizing taxes, and avoiding costly penalties. In this comprehensive guide, we’ll explain what RMDs are, who must take them, how to calculate your RMD, and proven strategies to reduce or control your RMDs for greater tax efficiency and peace of mind.

Key Takeaways

• As of 2026, most retirees must begin taking RMDs at age 73, and these withdrawals from tax deferred retirement accounts are taxed as ordinary income at both federal and Arkansas state levels.

• Bentonville retirees can significantly lower lifetime RMDs and taxes using strategies like Roth conversions, Qualified Longevity Annuity Contracts (QLACs), and Qualified Charitable Distributions (QCDs).

• Missing a required minimum distribution triggers a federal excise tax of up to 25% on the shortfall, though this can be reduced to 10% if corrected within two years.

• Revolutionary Wealth specializes in retirement and tax planning for Northwest Arkansas residents, coordinating RMD strategy with estate planning, investment management, and Medicare optimization.

• This article walks through how to calculate your RMD using IRS life expectancy tables, with concrete examples and current rules as of 2026.

Understanding Required Minimum Distributions (RMDs)

A required minimum distribution (RMD) is the minimum amount you must withdraw annually from certain retirement accounts once you reach a specific age. (Required minimum distributions (RMDs) are the minimum amounts you must withdraw from your retirement accounts each year.) The IRS requires these withdrawals to ensure the government eventually collects taxes on money that has grown tax-free in your tax deferred account for years—sometimes decades.

Under current law, including the SECURE Act and SECURE 2.0 through 2026, RMDs typically begin at RMD age 73 for most people who did not already start at 72 under prior rules. RMD rules apply to traditional IRA accounts, rollover IRAs, simplified employee pension (SEP) IRAs, simple IRA accounts, and most workplace retirement plan options like 401(k), 403(b), and governmental 457(b) accounts funded with pre-tax dollars.

Roth IRA accounts owned by you do not require RMDs during your lifetime—a key reason Roth strategies are powerful for tax planning. Roth IRAs do not require RMDs during the lifetime of the original owner. However, inherited Roth IRAs and some older designated Roth accounts may have separate distribution requirements.

For Bentonville, Arkansas retirees, federal RMD rules apply the same as in any other state. However, Arkansas’s income-tax treatment and your personal situation affect the real tax impact of your RMD withdrawal each year.

Next, we’ll cover when RMDs start and the key deadlines you need to know.

When RMDs Start and Key Deadlines

As of 2026, you must begin taking RMDs the year you turn 73, unless you were already required to start at age 72 under pre-2023 rules.

Your required beginning date is April 1 of the year following the year you reach your RMD age. For example, if you turn 73 in August 2026, your first RMD is technically due by April 1, 2027. However, delaying creates a trap: you would also owe your 2027 RMD by December 31, 2027, bunching two years of taxable income into one calendar year.

Key deadlines to remember:

• First RMD:April 1 of the year after you turn 73 (or take it in the actual year you turn 73 to avoid bunching)

• All subsequent RMDs:December 31 annually

The “still working” exception exists for employer sponsored retirement plans: if you remain employed by the plan sponsor and own less than 5% of that business sponsoring the plan, you may delay that workplace retirement plan’s RMDs until actual retirement. However, a Bentonville business owner who owns more than 5% cannot use this exception and must begin taking RMDs on schedule regardless of employment status.

Different timing rules apply to inherited IRA accounts and inherited workplace plans, which we cover in a later section.

Now that you know when RMDs start, let’s look at which accounts require RMDs and which do not.

Which Accounts Require RMDs (and Which Do Not)

The following account types require RMDs:

• Traditional IRA and rollover IRA

• SEP IRA (savings incentive match plan for employees of small employers)

• SIMPLE IRA

• 401(k) and Roth 401(k) (with recent rule changes)

• 403(b)

• Governmental 457(b)

• Profit sharing plans and money purchase plans

• Most defined contribution plans and qualified retirement plans

Accounts that donotrequire lifetime RMDs for the original account owner:

• Roth IRA (no RMDs while the IRA owner is alive)

• Non-retirement taxable brokerage account (no RMD rules apply)

Recent legislation has largely eliminated RMDs for Roth accounts inside workplace plans for owners, though older balances and inherited accounts can still trigger distribution requirements.

Consider two Bentonville retirees, both age 73:

Annuities held inside IRAs and retirement plan accounts are also subject to RMD rules, though mechanics differ when the annuity is already paying lifetime income payments.

With the basics covered, let’s move on to how to calculate your RMD step-by-step.

How to Calculate Your RMD Step-by-Step

RMDs are calculated by dividing the prior December 31 balance of the retirement account by a life expectancy factor published by the IRS.

The basic formula to calculate your RMD is straightforward:

Prior year December 31 account balance ÷ Life expectancy factor = RMD amount

Most retirement plan account owners use the Uniform Lifetime Table from IRS Publication 590-B. Here’s a worked example for 2026:

Example:A 73-year-old Bentonville resident has a $500,000 traditional IRA balance on December 31, 2025.

• Life expectancy factor at age 73: 26.5 (per current life expectancy table)

• Calculation: $500,000 ÷ 26.5 =$18,868 RMD for 2026

This entire amount counts as taxable income for the year.

Spousal exception:If your spouse is your sole beneficiary and more than 10 years younger, you use the Joint and Last Survivor Table instead, which typically provides a larger distribution period and smaller RMD. For example, if the same 73-year-old has a 62-year-old spouse as sole primary beneficiary, the factor might be approximately 27.5, yielding an RMD of $18,182—a $686 annual savings.

For beneficiaries of inherited accounts:The Single Life Table applies, with different factors based on the beneficiary’s age.

Important rules:

• Each IRA’s RMD must be calculated separately

• Each 401(k) or 457(b) requires its own calculation

• However, traditional IRAs allow aggregation: you can take the total RMD amount from one or any combination of your IRAs

We strongly recommend confirming your numbers with a tax advisor or qualified professional. Revolutionary Wealth routinely computes RMDs for clients and stress-tests them against projected tax brackets and Medicare premiums, often usingfinancial calculators and tax resourcesto refine these projections.

Next, let’s look at how to manage RMDs across multiple accounts.

Managing RMDs Across Multiple Accounts

Many Bentonville-area retirees hold several IRAs and workplace plans—perhaps an old 401(k) from a Fayetteville employer plus a rollover IRA plus a current employer’s 403(b). The aggregation rules differ by plan type:

Revolutionary Wealth helps clients inventory all retirement accounts, model consolidation options, and set up automated RMD withdrawals aligned with monthly income needs and tax planning as part of itspersonalized retirement and wealth management services.

Now, let’s examine the tax impact of RMDs for Bentonville, Arkansas retirees.

Tax Impact of RMDs for Bentonville, Arkansas Retirees

Federal Taxation

RMDs are treated as ordinary income at the federal level and add to your total taxable income. This income stacks on top of Social Security, pension income, and investment dividends.

Arkansas State Taxation

Arkansas also taxes RMD withdrawals as ordinary income, with limited retirement exclusions. Your state tax liability will depend on your total income and Arkansas’s current tax laws.

Impact on Social Security and Medicare

The ripple effects of RMD income include:

• Higher tax brackets:Two RMDs in one calendar year can push you into the 22% or 24% federal bracket.

• Social Security taxation:Up to 85% of benefits become taxable when combined income exceeds approximately $34,000 (single) or $44,000 (married).

• Medicare IRMAA surcharges:Part B and Part D premiums increase at approximately $106,000+ modified AGI for singles in 2026.

Those with $500,000+ in retirement savings or household income above roughly $200,000–$250,000 in retirement have the most at stake and benefit most from proactive RMD and tax planning.

Revolutionary Wealth builds multi-year tax projections for Northwest Arkansas clients showing how RMDs interact with Arkansas state taxes, Social Security, Medicare, and other investment income across their 60s and 70s, supported by a robustresource center for retirement and tax planning.

Next, let’s explore strategies to reduce or control future RMDs.

Strategies to Reduce or Control Future RMDs

While you cannot avoid RMDs on existing pre-tax balances once required, you can often reduce their size and tax consequences through planning done in your late 50s, 60s, and early 70s.

Roth Conversions

A Roth conversion moves money from a traditional IRA or pre-tax 401(k) into a Roth IRA. You pay taxes now so future withdrawals can be tax free and free from RMDs for the original account holder.

The years after retirement but before RMD age (roughly ages 60–72) are often ideal for conversions because income may be lower and you may sit in a relatively low tax bracket.

Example:A Bentonville couple, both age 65, has $1.2 million in pre-tax IRAs. They convert $80,000 annually between ages 65 and 72, paying approximately $12,000 federal tax each year (22% bracket). By age 73, their pre-tax balance shrinks to approximately $360,000.

Revolutionary Wealth runs multi-year Roth conversion analyses for clients, optimizing the “how much and when” decision and coordinating with the client’s CPA, and offerseducational retirement and tax-planning videosto help clients understand these strategies.

Qualified Longevity Annuity Contracts (QLACs)

A QLAC is a specific type of deferred income annuity purchased within an IRA or 401(k) that allows you to delay income—and RMDs on that portion—until as late as age 85.

Current IRS rules (post-SECURE 2.0) allow up to $200,000 or 25% of your account balance, whichever is less, to be allocated to a QLAC. This amount is excluded from your RMD calculation until annuity payments begin.

Example:A 68-year-old Bentonville retiree with a $900,000 IRA purchases a $200,000 QLAC. Their RMD-eligible balance drops to $700,000, reducing their age-73 RMD from approximately $33,962 to $26,415. The QLAC provides guaranteed income starting at age 85.

Trade-offs to consider:

• Loss of liquidity on QLAC dollars

• Insurer credit risk (favor A.M. Best A-rated carriers)

• QLACs suit longevity protection over flexibility needs

Revolutionary Wealth helps clients evaluate whether a QLAC is appropriate, comparing it with alternatives like systematic withdrawals or laddered annuities without RMD deferral features.

Qualified Charitable Distributions (QCDs)

A QCD is a direct transfer from your IRA to a qualified charity once you reach age 70½. It can satisfy your annual RMD and is excluded from taxable income if rules are followed.

QCDs are particularly attractive for charitably inclined retirees in Arkansas who take the standard deduction and therefore receive no extra tax break from itemizing donations. The annual limit is approximately $105,000 (indexed for inflation, likely $108,000+ in 2026).

Example:A 75-year-old Bentonville retiree has a $20,000 RMD requirement. They send $10,000 directly to a qualified local charity via QCD, leaving only $10,000 of RMD as taxable income. This reduces adjusted gross income by $10,000, potentially avoiding ~$2,200 in federal tax and lowering Medicare premium risk.

Operational requirements:

• QCDs must go directly from IRA custodian to charity (not from 401(k)s)

• Proper documentation required

• QCDs from Roth IRAs rarely make sense since Roth money is already tax-free

• Does not work like a charitable gift annuity—funds go directly to charity

Revolutionary Wealth integrates QCDs into broader giving and legacy strategies, coordinating with estate planning attorneys to align charitable gifts with wills, trusts, and beneficiary designations, drawing on the expertise of itsspecialized retirement planning team.

Beyond these strategies, there are additional tactics that can help you manage RMDs and taxes more effectively.

Other Planning Tactics to Manage RMDs and Taxes

Pre-RMD Withdrawals

Taking larger distributions in low-tax years before RMD age can help reduce future RMDs and overall tax liability.

Social Security Timing

Delaying benefits to age 70 for higher payments and lower early-retirement taxes can be a smart move for some retirees.

Pension Coordination

Timing pension start dates strategically can help manage taxable income and RMD impact.

Defined Benefit/Cash Balance Plans

Business owners can accelerate tax-deferred saving but must plan for future RMDs.

Fixed Indexed Annuities

When held outside IRAs in a taxable account, these grow tax-deferred without IRA-style RMDs (though withdrawals remain taxable).

Sequencing which accounts you draw from—taxable brokerage, Roth IRA, traditional IRA—can materially change your RMD size and lifetime tax bill. Revolutionary Wealth models different withdrawal orders for clients and helps them balancelifestyle-focused financial planning decisionswith long-term tax efficiency.

We recommend revisiting your plan annually or after major life changes: sale of a business, death of a spouse, move out of Arkansas, or large inheritance.

Next, let’s review the special RMD rules for inherited IRAs and beneficiaries.

RMD Rules for Inherited IRAs and Beneficiaries

Inherited accounts have their own RMD rules, significantly changed by the SECURE Act and SECURE 2.0.

The 10-year rule:Most non-spouse beneficiaries (adult children, friends, siblings) must empty the entire inherited account by the end of the 10th year after the original owner’s death. If the original account owner died after their required beginning date, annual RMDs may also be required within that period.

Eligible designated beneficiary exceptions:Surviving spouses, minor children of the decedent, disabled individuals, chronically ill individuals, and beneficiaries not more than 10 years younger than the deceased have more favorable payout options.

Example:An adult child in Rogers inherits a $300,000 IRA from a Bentonville parent. They need a withdrawal strategy to spread distributions over 10 years without spiking into higher tax brackets—potentially $30,000+ annually.

Proper beneficiary designations done in advance—something Revolutionary Wealth coordinates with estate attorneys—significantly affect how much of an IRA reaches heirs versus the Internal Revenue Service.

Now, let’s highlight common RMD mistakes and how to avoid them.

Common RMD Mistakes and How to Avoid Them

Avoiding mistakes with RMDs is crucial to prevent unnecessary taxes and penalties. Here are some of the most frequent errors:

• Forgetting a small IRA at an old bank account or former employer:Overlooked accounts can result in missed RMDs and penalties.

• Miscalculating the prior-year account balance:Using the wrong balance can lead to under- or over-withdrawal.

• Missing the first-year timing trap (two RMDs in one year):Delaying your first RMD can bunch two distributions into one tax year.

• Attempting to roll over RMD amounts:RMDs cannot be converted or rolled over; only excess funds can be moved.

• Assuming this year’s excess distribution covers next year’s RMD requirement:Each year’s RMD must be satisfied separately.

The IRS penalty for missed RMDs is steep: a 25% excise tax on the shortfall, reducible to 10% if corrected quickly via Form 5329 and reasonable cause explanation. Even careful retirees can slip up without a tracking system—this tax penalty can devastate retirement expenses.

Revolutionary Wealth uses account inventories, custodian coordination, and automated withdrawal schedules to help clients avoid these pitfalls—especially important for clients with multiple IRAs, old 401(k)s, and inherited accounts.

Consider a “dry run” with an advisor one to two years before your first required minimum distribution to spot potential problems early.

Let’s see how Revolutionary Wealth can help you with RMD distribution planning in Bentonville.

How Revolutionary Wealth Helps Bentonville Retirees with RMD Distribution Planning

Revolutionary Wealth is an independent wealth management and financial planning firm serving Bentonville and the broader Northwest Arkansas area, with deep experience in retirement income and tax strategy.

For clients, RMD planning is integrated into a broader retirement plan covering:

• Social Security timing optimization

• Business exit planning for local owners

• Estate and legacy planning

• Risk management and tax withholding coordination

Key services relevant to RMDs include precise RMD calculations, tax-bracket and Medicare modeling, multi-year Roth conversion plans, evaluation of QLACs and annuities, and coordinated charitable giving via QCDs.

Revolutionary Wealth manages over $100 million directly and advises on over $500 million annually, giving clients access to institutional-level planning tools while keeping advice highly personal.

If you’re a Bentonville-area retiree or business owner—especially between ages 59 and 67 or already taking RMDs—schedule a consultation to review your current RMD exposure and explore ways to pay taxes more efficiently over your lifetime.

To wrap up, here are answers to some frequently asked questions about RMD distribution.

Frequently Asked Questions About RMD Distribution

Can I avoid RMDs by moving money from my IRA into a Roth IRA after age 73?

Once an amount is counted as your RMD for the year, it cannot be converted to a Roth. The RMD must be taken first, then any additional IRA funds can potentially be converted. You can still perform Roth conversions after RMD age, but they don’t eliminate the current year’s RMD—they mainly reduce future RMDs by shrinking the remaining pre-tax balance. Talk with Revolutionary Wealth to determine whether conversions after 73 make sense given your bracket, health, and estate goals.

Do Arkansas state taxes change how I should think about my RMD strategy?

While RMD rules are federal, Arkansas’s treatment of retirement income and any future law changes can affect the net tax impact of your distributions. Arkansas taxes RMDs as ordinary income with limited retirement exclusions. Coordinate federal RMD planning with Arkansas state tax planning to avoid surprises, especially if you have large pensions or multiple income sources. Revolutionary Wealth works with local CPAs and stays current on Arkansas tax rules when designing income strategies.

What happens to my RMDs if I move away from Arkansas in retirement?

Federal RMD rules do not change if you relocate, but your new state’s income-tax rules can significantly change the after-tax outcome. Moving from Arkansas to a state with no income tax (like Texas or Florida) or to a higher-tax state is a good time to revisit withdrawal sequencing and Roth conversion plans. Revolutionary Wealth can continue advising clients who move, adjusting the RMD strategy to the new state’s tax landscape.

How do RMDs interact with fixed indexed annuities inside or outside my IRA?

Fixed indexed annuities held inside IRAs are subject to RMD rules—the insurance company and custodian typically calculate how much must be withdrawn each year. Fixed indexed annuities purchased with non-qualified (after-tax) money do not have RMDs, though withdrawals may still be taxable. Work with Revolutionary Wealth to align contract terms, income riders, and RMD obligations with your broader retirement income plan.

Is it ever smart to take more than the required minimum distribution?

Taking more than the minimum distributions can make sense when intentionally realizing income in a temporarily low tax bracket, funding a Roth conversion, or reducing a large IRA to minimize future RMDs and potential taxes on heirs. However, taking too much too quickly can shorten portfolio life or push you into higher brackets, increasing Medicare costs and taxes on Social Security. Revolutionary Wealth models different withdrawal scenarios to help clients decide when exceeding the RMD is strategically wise.

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.Past performance is no guarantee of future results.

Not associated with or endorsed by the Social Security Administration, Medicare or any other government agency.

Maximizing your Social Security Benefits assumes foreknowledge of your date of death. If as an example you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits.

Converting an employer plan account or Traditional IRA to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.

Fixed Annuities are long term insurance contracts and there is a surrender charge imposed generally during the first 5 to 7 years that you own the annuity contract. Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty.

Please consider the investment objectives, risks, charges, and expenses carefully before investing in Variable Annuities. The prospectus, which contains this and other information about the variable annuity contract and the underlying investment options, can be obtained from the insurance company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

The investment return and principal value of the variable annuity investment options are not guaranteed. Variable annuity sub-accounts fluctuate with changes in market conditions. The principal may be worth more or less than the original amount invested when the annuity is surrendered.

QLACs cannot be purchased with Roth or Inherited IRA dollars; value of such IRAs cannot be included in determining 25% premium limit. If Funding Source is Traditional IRA, 25% limit is calculated by combining the total value of all Traditional IRAs as of December 31st of the previous year. If Funding source is Employer sponsored qualified plan (401k, 403b and governmental 457b), 25% limit is calculated on an individual plan basis based on the plan’s account value on the previous day’s market close. If you previously purchased a QLAC, the calculation of your 25% limit is more complicated. Please contact an attorney or tax professional for additional details. Any guarantees of the annuity are backed by the financial strength of the underlying insurance company.

The projections or other information generated by Monte Carlo analysis tools regarding the likelihood of various investment outcomes are hypothetical in nature, are based on assumptions that you provide which could prove to be inaccurate over time, do not reflect actual investment results, and are not guarantees of future results. Results may vary with each use and over time.