What Is a Required Minimum Distribution (RMD)?
Last updated 04/09/2026 by
Ante Mazalin
Edited by
Andrew Latham
Summary:
A Required Minimum Distribution (RMD) is the minimum amount the IRS requires you to withdraw annually from tax-deferred retirement accounts starting at age 73, ensuring that pre-tax savings are eventually taxed rather than passed on indefinitely.
The rules apply to most retirement account types with one notable exception.
- Accounts affected: Traditional IRAs, SEP-IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, and most other tax-deferred workplace plans. Roth IRAs are exempt during the owner’s lifetime.
- Starting age: Age 73 under the SECURE 2.0 Act (enacted 2022). Rising to age 75 for those born in 1960 or later.
- Penalty for missing an RMD: A 25% excise tax on the amount you should have withdrawn but didn’t — reduced to 10% if corrected within two years.
RMDs matter most in retirement planning because they’re taxed as ordinary income in the year taken, potentially pushing you into a higher tax bracket, increasing Medicare premiums (via IRMAA surcharges), and affecting Social Security taxation.
Planning around RMDs — rather than reacting to them — is one of the most impactful tax strategies available to retirees.
Which Accounts Require RMDs
| Account Type | RMD Required? | Notes |
|---|---|---|
| Traditional IRA | Yes | Starting at age 73 |
| SEP-IRA | Yes | Starting at age 73 |
| SIMPLE IRA | Yes | Starting at age 73 |
| 401(k), 403(b), 457(b) | Yes | Can delay if still working for the sponsoring employer |
| Roth IRA | No | Exempt during owner’s lifetime |
| Roth 401(k) | No (starting 2024) | SECURE 2.0 eliminated Roth 401(k) RMDs |
| Inherited IRA | Yes | 10-year rule for most non-spouse beneficiaries |
How RMD Amounts Are Calculated
Your RMD for each account is calculated by dividing the account’s balance on December 31 of the prior year by your life expectancy factor from the IRS Uniform Lifetime Table.
RMD = Prior Year-End Account Balance ÷ IRS Life Expectancy Factor
Example: A 75-year-old with a $500,000 traditional IRA balance at December 31, 2024. The IRS Uniform Lifetime Table life expectancy factor for age 75 is 24.6.
RMD = $500,000 ÷ 24.6 = $20,325 must be withdrawn in 2025.
Most IRA custodians and 401(k) plan administrators calculate your RMD automatically and will notify you of the required amount each year. You can verify the calculation using the IRS worksheets in Publication 590-B.
RMD Deadlines
- Annual deadline: December 31 of each year.
- First RMD exception: Your very first RMD (for the year you turn 73) can be delayed until April 1 of the following year. However, delaying means you’ll take two RMDs in that second year — with two taxable distributions potentially pushing you into a higher bracket. Most financial planners recommend taking the first RMD in the year you turn 73 to avoid this.
- Multiple accounts: If you have multiple traditional IRAs, you calculate the RMD separately for each but can take the total from any one or combination of IRAs. 401(k) RMDs must be taken from each plan separately.
Pro Tip: Roth conversions before RMD age are one of the most powerful tools for reducing future RMDs. Converting traditional IRA funds to a Roth IRA during low-income years (early retirement before Social Security or RMD age) reduces the balance subject to future RMDs while locking in a lower tax rate. This strategy — often called the “Roth conversion ladder” — can significantly lower lifetime taxes for retirees with large tax-deferred balances.
The Penalty for Missing an RMD
Failing to take your full RMD triggers a 25% excise tax on the amount you should have withdrawn. Under SECURE 2.0, this drops to 10% if you correct the shortfall within a two-year correction window (by taking the missed RMD and filing Form 5329).
The IRS also has a formal waiver process for reasonable errors — first-time mistakes corrected promptly are often waived with a letter of explanation. Automating your annual RMD with your custodian eliminates the risk entirely.
Strategies to Manage RMD Tax Impact
- Qualified Charitable Distributions (QCDs): If you’re 70½ or older, you can donate up to $105,000 (2024, indexed for inflation) directly from your IRA to a qualified charity. QCDs count toward your RMD but are excluded from taxable income — a powerful strategy for charitable retirees.
- Roth conversions pre-73: Reducing the traditional IRA balance before RMDs begin shrinks future required distributions.
- Still-working exception: If you’re still employed at the company sponsoring your 401(k) at age 73, you can delay RMDs from that specific plan until you retire — but not from IRAs or plans from former employers.
- Reinvest after-tax RMDs: If you don’t need the income, reinvest RMD proceeds in a taxable brokerage account. The money was taxed, but it continues growing.
Key takeaways
- RMDs are mandatory annual withdrawals from tax-deferred accounts starting at age 73, calculated by dividing the prior year-end balance by your IRS life expectancy factor.
- Traditional IRAs, SEP-IRAs, SIMPLE IRAs, and 401(k)s are all subject to RMDs. Roth IRAs are exempt during the owner’s lifetime.
- Missing an RMD triggers a 25% excise tax (reduced to 10% with timely correction). Automating distributions with your custodian eliminates this risk.
- Your first RMD can be delayed to April 1 of the year after you turn 73 — but this means two RMDs in one year, which may push you into a higher tax bracket.
- Qualified Charitable Distributions (QCDs) let you satisfy your RMD while excluding the distribution from taxable income — the most tax-efficient option for charitable retirees.
- Roth conversions before age 73 reduce future RMD amounts by shrinking the tax-deferred balance subject to required withdrawals.
Frequently Asked Questions
Do I owe RMDs on my Roth IRA?
No. Roth IRAs have no RMDs during the account owner’s lifetime — one of their most valuable advantages for estate planning. However, non-spouse beneficiaries who inherit a Roth IRA must still withdraw all funds within 10 years (though those distributions remain tax-free).
Can I take more than my required minimum distribution?
Yes. The RMD is a floor, not a ceiling. You can withdraw any amount above your RMD, though the excess is also taxable. You cannot, however, apply extra withdrawals from one year to satisfy the next year’s RMD requirement.
What happens to RMDs when I die?
Beneficiaries who inherit tax-deferred accounts have their own RMD rules. Under the SECURE 2.0 Act, most non-spouse beneficiaries must empty inherited accounts within 10 years. Spouses have more flexibility, including the option to roll the inherited account into their own IRA and defer RMDs until they reach age 73.
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