RMDs: When Retirement Accounts Force Withdrawals

Required minimum distributions (RMDs) are the amounts federal tax rules say you must take each year from most pre-tax retirement accounts once you reach a statutory age. Traditional IRAs and pre-tax 401(k)s got tax-deferred treatment on the way in, so the code eventually requires a taxable distribution. An RMD is a tax-timing rule. It is not a spending recommendation and not a guaranteed paycheck.

Examples below use labeled assumptions and Uniform Lifetime Table factors from current IRS tables. Ages, tables, and penalties can change. Confirm the year you are planning for with IRS publications or a qualified tax professional.

Which accounts require RMDs

Traditional IRAs, SEP IRAs, and SIMPLE IRAs generally require RMDs. Pre-tax 401(k), 403(b), and similar workplace balances generally do too, with a possible delay while you still work for that employer if you are not a 5% owner. That “still working” delay does not apply to IRAs, and it does not apply to a 401(k) left at a former employer.

Roth IRAs generally do not require lifetime RMDs for the original owner. Workplace Roth balances such as Roth 401(k)s generally no longer require RMDs for the participant during life after a change that took effect in 2024. After death, inherited Roth and inherited traditional accounts can still have deadlines.

If you hold several IRAs, you generally calculate an RMD for each, add them, and may withdraw the total from one or more IRAs. Workplace plans are stricter: RMDs from 401(k)s are typically calculated and taken plan by plan. Do not assume you can skip a former employer’s 401(k) RMD because you took enough from an IRA.

When lifetime RMDs begin

SECURE 2.0 raised the starting age. Under current law, people born in 1951 through 1959 generally begin at age 73. People born in 1960 or later generally begin at age 75. Anyone who already hit an earlier RMD age under prior law may already be in the cycle. Match the rule to your birth year and to the law in effect for that tax year.

The first RMD has a special calendar:

1. You reach the statutory RMD age during a calendar year.
2. You may take that first RMD by December 31 of that year, or delay until April 1 of the following year.
3. If you delay, you still must take the next year’s RMD by December 31 of that same following year.

Delaying the first RMD can put two taxable withdrawals in one calendar year. That can push you into a higher bracket and affect Medicare premium surcharges. It is a timing choice, not a gift from the IRS.

Later RMDs are due by December 31. A January withdrawal cannot cover the prior year once you are past that first April 1 exception. Automatic distributions help with deadlines; they do not choose a tax-smart amount above the minimum.

How the yearly amount is figured

For most owners whose spouse is not more than 10 years younger, the Uniform Lifetime Table supplies a life-expectancy factor based on your age on your birthday in the distribution year. The basic illustration is:

The balance is fair market value on December 31 of the prior year, with adjustments in special cases such as a qualifying rollover in progress. The factor comes from the IRS table—not from your personal health or from a retirement calculator’s assumed return. As you age, the factor falls, so the same balance produces a larger RMD. Growth raises next year’s numerator; declines can shrink it. You still use that year’s table and that year’s prior year-end value.

Spouse more than 10 years younger

If your sole beneficiary is a spouse more than 10 years younger, a Joint Life table can produce a smaller RMD. The beneficiary designation must actually support that treatment. Informal plans to “leave it to my spouse” are not enough if the form names a trust or multiple people.

Qualified charitable distributions

A qualified charitable distribution (QCD) is a direct transfer from an IRA to an eligible charity, up to an annual dollar limit the IRS indexes. A QCD can count toward the IRA RMD when rules are met, and it is excluded from taxable income rather than taken as a charitable deduction. QCDs have an age threshold and paperwork rules. Look up the current-year dollar limit instead of reusing an old article’s figure.

Inherited accounts

Rules after death are a separate system from lifetime RMDs. The SECURE Act limited the old “stretch IRA” for many non-spouse beneficiaries. Many designated beneficiaries must empty an inherited IRA by the end of the tenth year after death. Depending on whether the original owner had already reached the required beginning date, annual RMDs may also be required in years before year ten. IRS guidance is detailed; death date, account type, and beneficiary category matter.

Eligible designated beneficiaries—such as a surviving spouse, a minor child of the decedent, a disabled or chronically ill individual, or someone not more than 10 years younger—may have additional options, including, for a spouse, treating the IRA as their own. Minor children generally lose that special status at majority. Trusts named as beneficiaries can fail see-through rules if drafted poorly. Missed inherited RMDs can carry the same family of penalties as missed lifetime RMDs.

Taxes, penalties, and taking more than the minimum

Pre-tax RMDs are generally ordinary income in the year received. State tax may apply. Withholding is available; some people withhold extra to cover the bill. Withholding is a prepayment, not an extra tax. Roth portions, if any, follow Roth basis rules.

Withdrawing less than the RMD can trigger an excise tax—generally 25% of the shortfall under current federal rules, potentially 10% if you correct within the IRS window and meet conditions. The IRS may waive the penalty in some cases with reasonable cause and remedial steps. None of those outcomes is automatic.

You may always take more than the RMD from your own IRA or 401(k), subject to plan rules. Extra withdrawals do not create a credit for next year. They can reduce next year’s balance and thus next year’s RMD. Whether that helps depends on brackets now versus later and on your spending need.

Practical habits that reduce errors:

• Track each 401(k) separately and IRAs as a group, matching aggregation rules.
• Use the prior December 31 statement value, not a live balance in March.
• Calendar the first-year April 1 option so you do not stack two large taxable withdrawals by accident.
• After a rollover, confirm which institution is responsible for that year’s RMD.

Worked example: Uniform Lifetime Table

This worked example is an illustration. Assume you are age 73 in the distribution year, your spouse is not more than 10 years younger, and you use the Uniform Lifetime Table factor of 26.5 (the factor associated with age 73 in the current IRS table used here). Assume a traditional IRA worth $525,000 on December 31 of the prior year, and no other IRAs.

The RMD is about $19,811.32. Withdraw exactly that from the IRA and you have met the IRA minimum for that year under these assumptions. Later growth or decline affects next year’s RMD, not this year’s, because this year’s numerator is locked to last year’s year-end value.

Now assume you also have a former-employer 401(k) worth $105,000 on the same December 31, and you are not using a still-working exception. Using the same 26.5 factor, that plan’s RMD is $105,000 / 26.5 ≈ $3,962.26. You generally must take that amount from the 401(k), not from the IRA, to satisfy the 401(k) RMD.

None of these figures is a spending budget. You could withdraw more. You could satisfy an IRA RMD with a QCD if you qualify. Do not treat the RMD as the amount a retirement calculator says you “need.” Retirement tools on this site estimate growth or drawdown under constant-return assumptions. Markets are not guaranteed, and an RMD does not protect you from running out of money.

Limits of RMD illustrations

For many owners, RMD math is a single division. The hard parts are eligibility, aggregation, beneficiary forms, rollover timing, QCDs, and the tax bill after the withdrawal. Tables, ages, and penalty rates have been amended more than once.

This guide does not calculate your bracket, Medicare premiums, or state treatment of retirement income. It does not tell you whether to convert to a Roth before RMDs begin. Conversions can raise taxable income now and may reduce future RMDs if money moves into a Roth IRA, but they can backfire at a high bracket.

Use the retirement calculator to sketch savings and withdrawal needs under stated return assumptions, then treat RMDs as a constraint on pre-tax accounts once you reach the statutory age. Replace every example balance and age with your own year-end statements and date of birth.