A required minimum distribution, usually shortened to RMD, is the minimum amount you must withdraw each year from certain retirement accounts. This kicks in once you reach a specific age. The government lets these accounts grow tax-deferred for decades. Eventually, it wants its share of tax revenue, and the RMD rule forces that moment to arrive.

This isn’t optional, and it isn’t a suggestion. Once you hit the required age, the IRS expects a minimum withdrawal every year. That amount gets calculated using a formula based on your account balance and your life expectancy. You can withdraw more than the minimum if you want. You just can’t withdraw less.

Traditional 401(k)s and traditional IRAs both require RMDs. These accounts gave you a tax deduction when you contributed. The government eventually collects tax on the withdrawals in exchange. This applies to SEP IRAs and SIMPLE IRAs too, since they follow the same traditional, pre-tax structure.

Roth IRAs never require RMDs for the original account owner, regardless of age. Roth 401(k)s used to require them, but recent legislation removed that requirement. This brought Roth 401(k)s in line with Roth IRAs on this specific point. If you’ve been contributing to a Roth 401(k) and worrying about eventual forced withdrawals, that concern no longer applies under current rules.

The RMD starting age has shifted a few times in recent years due to legislative changes. It currently sits at 73 for most people reaching that age under current law. Check the specific rule in effect for your birth year. The exact threshold has moved and could shift again with future legislation.

Your very first RMD comes with a special deadline. You can delay it until April 1 of the year after you turn the required age. That’s later than the normal December 31 deadline. This sounds generous, but it comes with a catch. Delaying the first RMD means taking two RMDs in that same calendar year, since the second year’s RMD still comes due by its normal December 31 deadline. That can push you into a higher tax bracket for that one year, so delaying isn’t automatically the smart move for everyone.

The IRS calculates your RMD using a simple formula. Take your account balance as of December 31 of the previous year. Divide it by a life expectancy factor from an IRS table. The most commonly used table is the Uniform Lifetime Table. Most account holders use it, unless their spouse is more than 10 years younger and is their sole beneficiary.

As you get older, the life expectancy factor gets smaller. That means the percentage of your account you’re required to withdraw increases each year. At 73, the factor requires withdrawing a bit under 4% of your balance. By your late 80s, that percentage climbs into the high single digits, and it keeps rising the older you get.

Say you turn 73 this year, and your traditional IRA held $500,000 as of December 31 last year. The IRS life expectancy factor for someone turning 73 is 26.5. Divide $500,000 by 26.5, and your RMD for this year comes to roughly $18,868.

Next year, assume your balance stays at $500,000 after the withdrawal and any growth roughly offsets it. Your life expectancy factor drops slightly, to around 25.5. That pushes your required withdrawal up to about $19,608, even on the same balance. This is why RMD percentages creep upward every year. It’s simply how the math is designed to work as you age.

Miss your RMD, or withdraw less than required, and the IRS can charge an excise tax on the shortfall. This penalty used to sit at 25% of the amount you should have withdrawn but didn’t. Recent changes reduced it to a lower rate. That reduction only applies if you correct the mistake within a specific window, typically two years, by taking the missed distribution and filing the right paperwork.

This penalty applies on top of the regular income tax you’ll still owe on the eventual withdrawal. In other words, missing an RMD doesn’t let you avoid the tax. It just adds a painful extra fee for the mistake. Discover you’ve missed one? Correct it promptly. Request a penalty waiver citing reasonable cause. That path is generally recommended over staying silent and hoping it goes unnoticed.

Yes, absolutely. The RMD sets a floor, not a ceiling. You can withdraw as much as you want above that minimum, whenever you want throughout the year. Withdrawing extra one year doesn’t reduce or offset next year’s required amount, though. Each year’s RMD gets recalculated fresh, based on your balance and life expectancy factor at that specific point.

Some retirees intentionally withdraw more than the minimum in years when they expect a lower tax bracket. This spreads taxable income more evenly across retirement. The alternative is taking the smallest possible amount every year, which can lead to larger, more concentrated withdrawals later on.

Withholding also deserves a mention here. You can choose to have federal, and sometimes state, taxes withheld directly from an RMD, similar to how a paycheck gets taxed before it lands in your account. Some retirees use this as a convenient way to cover their annual tax bill without needing to make separate estimated tax payments throughout the year.

Say you have multiple traditional IRAs. You can calculate the RMD for each one separately, then withdraw the combined total from just one of those IRAs if you prefer. There’s no need to take a separate withdrawal from every single account. This aggregation rule applies specifically to IRAs.

401(k)s work differently. Each 401(k) requires its own separate RMD withdrawal from that specific account. You generally can’t satisfy one 401(k)’s RMD by withdrawing extra from a different 401(k) or from an IRA instead. Keeping track of which rule applies to which account type matters. Getting this wrong can accidentally trigger a missed-RMD penalty on an account you thought you’d already covered.

If you’re charitably inclined, a qualified charitable distribution lets you send your RMD, or a portion of it, directly to an eligible charity. It never has to touch your own bank account. This amount counts toward satisfying your RMD requirement. But it doesn’t count as taxable income to you, since the money never actually passes through your hands.

This can meaningfully lower your taxable income for the year. Compare it to taking the full RMD as cash and donating separately afterward, since a direct charitable donation doesn’t get the same tax treatment. There are specific rules and annual limits involved. It’s worth discussing with a tax professional if you’re considering it, rather than assuming any charitable gift from retirement funds automatically qualifies.

Inherit a retirement account rather than owning it as the original contributor, and a different, often more complicated set of RMD rules applies. It depends on your relationship to the original owner and when they passed away. Many non-spouse beneficiaries now face a requirement to fully deplete an inherited account within 10 years. This sometimes comes without the same annual RMD flexibility that applies to your own account.

This is different enough from standard RMD rules that it deserves its own separate research. Don’t assume the same required minimum distribution rules that apply to your personal accounts carry over identically to an inherited one.

RMDs eventually force taxable withdrawals regardless of your other income needs. Because of this, some people plan around them years in advance. One common strategy is converting portions of a traditional account to a Roth account earlier in retirement, when their tax bracket is temporarily lower. The goal is shrinking the balance that will eventually generate RMDs. Our article on Roth vs. traditional 401(k) and our piece on Roth vs. traditional IRA both cover the tax-timing logic behind decisions like this.

If you’re still working and deciding how to prioritize contributions between account types today, our article on 401k vs IRA covers that separate but related decision. Our Retirement Calculator can help you project how a given balance might grow, and roughly what an eventual RMD could look like once you reach the required age.