November 7, 2025

Understanding Required Minimum Distributions (RMDs)

Published By

Diana Hoff

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A Required Minimum Distribution (RMD) is the smallest amount the IRS requires you to withdraw from certain retirement accounts each year, once you reach a designated age. The purpose of RMDs is to ensure that funds in tax-advantaged accounts eventually become taxable rather than staying sheltered indefinitely.

RMD rules apply to traditional IRAs (including SEP, SIMPLE, and SARSEP IRAs) and to defined contribution retirement plans (such as 401(k), 403(b), and profit-sharing plans). They do not apply to Roth IRAs while the original owner is alive. (IRS.gov) ‍

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When Must You Begin Taking RMDs? ‍

IRAs

Your first RMD must be taken by April 1 of the year following the year you turn 73.
All future RMDs must be taken by December 31 each year, regardless of whether you are retired.

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Defined Contribution Plans (Employer plans like 401(k), 403(b), etc.)

The first RMD must be taken by April 1 of the year following the year you turn 73 or by December 31 of the year you retire (if your plan allows it).
Many participants can wait until April 1 after retiring to receive distributions if their workplace plan allows it. This exception does not apply to 5% (or more) business owners. They cannot delay and must take their first RMD by April 1 after turning 73.
All subsequent RMDs are due by December 31 annually.

‍Example: If you turn 73 in 2025, your first RMD is due by April 1, 2026. But your second RMD (for the 2026 tax year) must also be taken by December 31, 2026. This means you could end up taking two RMDs in 2026, potentially increasing your taxable income for that year. ‍

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How Is the RMD Calculated?

The calculation is based on your account balance as of December 31 of the previous year.
That balance is divided by a distribution period factor from the IRS life expectancy tables (Uniform Lifetime Table, or the Joint Life and Last Survivor Table if your spouse is your sole beneficiary and more than 10 years younger).
The IRS provides worksheets and examples in Publication 590-B to help you determine the correct amount.

‍Example:

If you were 75 years old in 2024 with a $100,000 IRA balance as of December 31, 2023, and your distribution period is 24.6, your RMD would have been:

$100,000 ÷ 24.6 = $4,065

This means you needed to withdraw at least $4,065 in 2024. ‍

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Multiple Accounts and Aggregation Rules

IRAs: You must calculate the RMD separately for each IRA, but you can withdraw the total amount from one or more of your IRAs.
Defined Contribution Plans: Each plan (like a 401(k)) requires its own RMD withdrawal; you cannot aggregate across different employer plans.
Exception: Owners of multiple 403(b) accounts may aggregate their RMDs.

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Flexibility and Penalties

You can withdraw more than the required minimum amount if you choose.
You can take the RMD in one lump sum or in multiple installments throughout the year.
Failure to withdraw the full RMD triggers a 25% excise tax on the shortfall (reduced to 10% if corrected within two years).

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Special Rules for Roth IRAs

Roth IRAs are not subject to RMDs during the lifetime of the original owner.
Beneficiaries of inherited Roth IRAs, however, must follow distribution rules after the account owner’s death.

IRS Resources for RMDs

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Final Thoughts

RMDs can be complex, especially if you have multiple accounts or are balancing retirement income needs with tax planning. The rules are strict, and missing an RMD can be costly. Take time to review your accounts and consider speaking with your CPA or financial planner to ensure your withdrawal strategy aligns with your retirement goals. ‍

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