For decades you may have been encouraged to defer as much income as possible into tax-advantaged retirement accounts. At some point the IRS wants those taxes paid. That mechanism is the Required Minimum Distribution — or RMD. Understanding the rules early gives you years to plan around them.
When RMDs begin
Under current law (the SECURE Act 2.0):
- RMDs begin at age 73 for those born between 1951 and 1959.
- RMDs begin at age 75 for those born in 1960 or later.
- Your first RMD can be delayed until April 1 of the year following the year you reach RMD age, but doing so means taking two RMDs in the same calendar year.
Which accounts are subject
RMDs apply to most tax-deferred accounts:
- Traditional IRA, SEP IRA, SIMPLE IRA
- 401(k), 403(b), 457(b), and similar workplace plans
- Inherited IRAs (with separate rules and timelines)
Roth IRAs do not require distributions during the original owner's lifetime. As of 2024, Roth 401(k) balances are also no longer subject to RMDs while the owner is alive.
How the amount is calculated
Each year's RMD equals your prior-year December 31 account balance divided by an IRS life-expectancy factor. The IRS publishes the factor in the Uniform Lifetime Table (or the Joint Life Table if your spouse is more than 10 years younger and is the sole beneficiary). Your custodian usually calculates the figure for you, but it is worth checking, especially if you hold accounts at more than one firm.
Strategies retirees use to manage the bite
RMDs are not optional, but the tax impact can often be managed:
- Roth conversions before RMD age — moving balances to Roth in lower-bracket years (often early retirement) can shrink future RMDs and reduce lifetime taxes.
- Qualified Charitable Distributions (QCDs) — those age 70½ or older may direct up to a statutory limit per year from an IRA to qualified charities. QCDs count toward the RMD but are excluded from taxable income.
- Aggregating RMDs across multiple IRAs — you can take the total IRA RMD from any one (or combination) of your traditional IRAs. 401(k) RMDs must usually be taken from each plan separately.
- Timing the withdrawal — some retirees take monthly withdrawals for budgeting; others wait until late in the year for flexibility on tax planning.
The penalty for missing an RMD
Historically, missing an RMD triggered a 50% excise tax on the shortfall — one of the steepest penalties in the tax code. SECURE Act 2.0 reduced the penalty to 25%, and to 10% if corrected promptly. It is still a heavy penalty and worth avoiding. If you ever miss an RMD, taking the distribution and filing Form 5329 with a corrective explanation is the standard next step.
Frequently Asked Questions
Can I take more than my RMD?
Yes. The RMD is a minimum, not a maximum. Many retirees take more than the RMD in some years and only the minimum in others, depending on cash flow and tax bracket planning.
Do I have to take an RMD from my Roth IRA?
No. The original owner of a Roth IRA never has to take an RMD during their lifetime. Heirs who inherit a Roth IRA do face distribution requirements.
What is a Qualified Charitable Distribution?
A QCD lets traditional IRA owners age 70½ or older direct a portion of their IRA distributions directly to a qualified charity. The distribution counts toward the year's RMD but is excluded from the IRA owner's taxable income.
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