What Are Required Minimum Distributions (RMDs)?

Required minimum distributions (RMDs) are the minimum amounts you must withdraw each year from certain retirement accounts under federal tax rules. For many Americans, these withdrawals begin at age 73. The rules apply to accounts such as traditional IRAs and most employer-sponsored retirement plans.

Understanding RMDs can help you prepare for retirement income, avoid unnecessary tax complications, and meet IRS deadlines. The exact requirements depend on the type of account you own, your age, and whether you are the original account holder or a beneficiary.

What Is a Required Minimum Distribution?

A required minimum distribution is the amount the IRS generally requires you to withdraw from certain tax-advantaged retirement accounts each year.

These rules affect many people who have saved money in retirement accounts over several decades. Contributions to traditional retirement accounts may have received tax advantages, so the government requires withdrawals to begin at a specified age.

An RMD is a minimum, not a maximum. You can generally withdraw more than the required amount, although additional withdrawals may increase your taxable income.

RMD rules also apply to certain inherited retirement accounts. Beneficiaries may face different deadlines and distribution requirements than the original account owner.

At What Age Do RMDs Begin?

For many retirement account owners, RMDs begin in the calendar year they turn 73. However, the applicable starting age depends on birth year.

Under the current rules:

• Born before 1951: Different starting-age rules may apply, including rules for people who had already reached the previous starting age.
• Born from 1951 through 1959: The general starting age is 73.
• Born in 1960 or later: The scheduled starting age is 75 under the later-age provisions.

Your first RMD is generally due by April 1 of the year after you reach your applicable starting age. You can instead take it during the year you reach that age.

Delaying your first distribution can mean taking two RMDs in the same calendar year: the first by April 1 and the next by December 31. Both withdrawals may affect your taxable income for that year.

Check the IRS RMD guidance to confirm which rules apply to your birth year and account.

Which Retirement Accounts Require RMDs?

RMD requirements apply to several common retirement accounts.

Traditional IRAs: Owners generally must begin taking RMDs at the applicable starting age, even if they are still working.

SEP and SIMPLE IRAs: These accounts generally follow the applicable IRA distribution rules.

401(k) and 403(b) plans: These employer-sponsored retirement accounts generally require RMDs. Some workplace plans allow eligible employees to delay distributions until retirement, subject to plan rules and ownership exceptions.

Other employer-sponsored plans: Certain profit-sharing and governmental 457(b) plans are also subject to RMD requirements.

Do Roth IRAs Have RMDs?

Original owners of Roth IRAs do not have to take RMDs during their lifetimes. Designated Roth accounts in workplace plans, such as Roth 401(k)s, also generally have no lifetime RMD requirement under current rules.

Beneficiaries of Roth accounts may still have distribution obligations after the original owner dies. Inherited account rules depend on the beneficiary’s circumstances and the applicable tax law.

This distinction matters because a Roth IRA and a traditional IRA can have different withdrawal requirements, even when both are used for retirement savings.

How Are RMDs Calculated?

The RMD calculation generally uses two figures:

1. The retirement account balance on December 31 of the previous year.
2. An applicable life-expectancy factor from the IRS distribution tables.

The account balance is divided by the relevant factor to determine the required distribution.

For example, suppose a person has a traditional IRA worth $265,000 on December 31 of the previous year. Assume the person is age 73 and uses the IRS Uniform Lifetime Table factor of 26.5.

The calculation would be:

$265,000 ÷ 26.5 = $10,000

In this hypothetical example, the person’s RMD would be $10,000.

The actual calculation can differ if a different IRS table applies. For example, a spouse who is the sole beneficiary and more than 10 years younger than the account owner may qualify for a different calculation method.

If you have multiple retirement accounts, you may need to calculate an RMD for each one. Certain IRAs allow the owner to combine the calculated amounts and withdraw the total from one or more eligible IRAs. Employer-sponsored plans generally have different aggregation rules, so one account’s excess withdrawal cannot automatically satisfy another account’s requirement.

The IRS explains the calculation methods in Publication 590-B.

When Are RMDs Due?

The usual deadline for your first RMD is April 1 of the year after you reach the applicable starting age. Every subsequent annual RMD is generally due by December 31 of that year.

For example, someone who reaches age 73 in 2026 would generally have these options:

• Take the first RMD by December 31, 2026.
• Alternatively, delay the first RMD until April 1, 2027.
• Take the next annual RMD by December 31, 2027.

Choosing the second option means two distributions could fall within 2027. Depending on the account and the individual’s tax situation, that could result in a larger taxable income amount for that year.

Workplace plans and certain specialized accounts may have additional rules or exceptions. Confirm your deadlines with your plan administrator or the IRS before deciding when to withdraw the money.

Are Required Minimum Distributions Taxable?

RMDs from traditional IRAs and many traditional employer-sponsored retirement accounts are generally included in ordinary taxable income.

However, the amount subject to tax depends on the account and its history. For example, certain nondeductible contributions may create a tax basis, meaning part of a distribution may not be taxable.

Qualified distributions from Roth accounts generally receive different tax treatment. In addition, beneficiaries may face different rules depending on the inherited account.

An RMD is not automatically subject to the same tax treatment in every situation. Your other income, deductions, and applicable tax rules can also affect your overall tax liability.

For general information about IRA distributions, consult IRS Publication 590-B. A qualified tax professional can help clarify how the rules apply to a particular account.

What Happens If You Miss an RMD?

Failing to withdraw the full required amount by the deadline can result in an IRS excise tax.

Under the general rules, the tax is 25% of the amount that should have been withdrawn but was not. The rate may be reduced to 10% if the shortfall is corrected within the applicable correction period and the requirements are met.

The IRS may also waive the tax in qualifying circumstances when the failure resulted from reasonable error and the account owner takes reasonable steps to correct it.

If you discover a missed distribution, review the applicable IRS instructions and consider speaking with a tax professional. Depending on the circumstances, you may need to correct the shortfall and file Form 5329.

See the IRS guidance on RMDs for information about penalties and correction procedures.

Can You Withdraw More Than the Required Amount?

Yes. You can generally take a distribution larger than your RMD.

However, withdrawing more than the required amount in one year generally does not reduce the RMD you must take in a future year.

For example, if your required distribution is $10,000 but you withdraw $15,000, the additional $5,000 generally cannot be carried forward to satisfy the following year’s RMD.

This is why understanding the calculation and deadlines matters, particularly when you hold several retirement accounts.

Bottom Line

Required minimum distributions are an important part of managing certain retirement accounts. They determine how much you must withdraw each year, when those withdrawals are due, and how much may be included in taxable income.

The key steps are to identify which accounts are subject to RMDs, confirm your applicable starting age, calculate the correct amount, and meet the relevant deadlines.

Because the rules vary by account type and personal circumstances, verify current IRS guidance before taking action. Understanding the requirements can help you avoid missed distributions and make more informed decisions about retirement income.

Sources

• Internal Revenue Service — Retirement Plan and IRA Required Minimum Distributions FAQs
• Internal Revenue Service — Retirement Topics: Required Minimum Distributions
• Internal Revenue Service — Publication 590-B: Distributions from Individual Retirement Arrangements

This article provides general educational information and is not individualized financial, tax, or legal advice.