Required minimum distribution (RMD)

Before you rely on it

What to check

Confirm current rules and your applicable factor with the IRS or a tax professional.

The common error

Where people go wrong with required minimum distribution (RMD)

Assuming the age and the factors are what they were. Both have changed more than once in recent years, and planning off an outdated figure produces a shortfall.

Worked through

Required minimum distribution (RMD) in plain numbers

A retirement account had a balance of $500,000 at the end of the previous year; the account owner turns 75 this year. Using an illustrative divisor of 24.6 from the IRS Uniform Lifetime Table, the required withdrawal is $500,000 ÷ 24.6, or about $20,325; the divisor falls each year, so the required percentage rises with age. The table and the starting age depend on the law in force and the year of birth. Missing a required distribution can bring a penalty, so people often take the withdrawal before year-end. The example is for illustration. The current tables and rules apply to your situation.

Easily confused

Required minimum distribution (RMD) and its neighbours

An RMD is not a voluntary withdrawal, and it is not a required amount for every account type; it is the minimum that must be taken from certain tax-deferred retirement accounts once the owner reaches a set age. Roth accounts owned by the original owner are generally not subject to it during life, but rules for inherited accounts differ; it is separate from early withdrawal penalties, which apply before a certain age. Different accounts follow different rules for aggregating the requirement.

In real decisions

Where required minimum distribution (RMD) turns up

Retirees and their advisors calculate RMDs each year to plan taxes, spending and account balances; the withdrawal is generally taxable income, so it affects tax brackets and some benefit thresholds; some people use charitable transfers or plan Roth conversions before the RMD years. Calculators give a first estimate from the balance, age and table. A plan administrator or custodian often computes it as well.

Know the edges

Where required minimum distribution (RMD) stops being reliable

Rules have been changed by legislation several times, and starting ages depend on birth year. Inherited accounts follow different schedules. Estimates use assumptions about the balance and the table. Penalties and exceptions are complex. This page is general information and not tax advice. Confirm with current IRS guidance or a qualified tax professional.

Quick answers

What people ask about required minimum distribution (RMD)

What if I miss an RMD? A penalty may apply to the amount not withdrawn, and rules allow correction and relief in some cases. Take the distribution as soon as you notice, and ask a tax professional.

Do I need to take RMDs from every account? It depends on the account types. Some accounts can be combined for the calculation and withdrawn from one, and others must be handled separately. Check the rules for each type.

Can I give my RMD to charity? Rules allow certain qualified charitable transfers that can satisfy the requirement without adding to taxable income. Conditions apply.

Does the RMD count as taxable income? Generally yes, for traditional accounts. It is added to your income for the year and can affect your bracket and some benefit thresholds.