What Is a Required Minimum Distribution (RMD)?

A Required Minimum Distribution is the minimum amount the IRS requires you to withdraw each year from your tax-deferred retirement accounts once you reach a certain age. Understanding the rules — and the serious penalties for missing them — is essential for every retirement account holder and their beneficiaries.

1. What Is a Required Minimum Distribution?

A Required Minimum Distribution (RMD) is the minimum dollar amount that the Internal Revenue Service (IRS) mandates you withdraw from your qualifying retirement accounts each year once you reach a certain age. The government allows tax-deferred growth within traditional retirement accounts — meaning you never paid income tax on those contributions or on their earnings — but that deferral cannot go on forever. The RMD rules ensure that the government eventually collects the income tax it deferred.

The amount you must withdraw is calculated by dividing your account balance (as of December 31 of the prior year) by a life expectancy factor published in IRS tables. As you age, the life expectancy factor decreases, which means the percentage of your account you must withdraw each year gradually increases.

RMDs apply to a broad range of retirement accounts, including Traditional IRAs, SEP-IRAs, SIMPLE IRAs, 401(k) plans, 403(b) plans, 457(b) governmental plans, and most other employer-sponsored retirement plans. Roth IRAs are the major exception — Roth IRA owners are not required to take RMDs during their lifetime, though Roth 401(k) and Roth 403(b) accounts were subject to RMDs before the SECURE 2.0 Act eliminated that requirement.

2. Who Must Take RMDs?

RMDs are required for virtually all owners of tax-deferred retirement accounts once they reach the applicable starting age. Specifically, the rules apply to:

• Traditional IRA owners — must begin RMDs at age 73 (for those born 1951–1959) or 75 (for those born 1960 or later, per SECURE 2.0).
• SEP-IRA and SIMPLE IRA owners — same age rules as Traditional IRA owners.
• 401(k) and 403(b) participants — generally must begin at age 73 (or 75 if born 1960+), but participants who are still working at a company (and do not own 5% or more of the business) can delay RMDs from that specific employer's plan until the year they retire.
• Governmental 457(b) plan participants — follow the same general rules.
• Inherited IRA beneficiaries — subject to separate, complex rules depending on their relationship to the deceased owner and when the account was inherited (discussed in detail in Section 6).

You are not required to take RMDs from:

• Roth IRA accounts (during your lifetime)
• Roth 401(k) or Roth 403(b) accounts — SECURE 2.0 eliminated RMDs from these accounts starting in 2024.
• Qualified longevity annuity contracts (QLACs) — up to certain limits, QLAC assets are excluded from the RMD calculation base.

3. How to Calculate Your RMD

The calculation itself is straightforward: divide your prior year-end account balance by the appropriate IRS life expectancy factor. However, choosing the correct life expectancy table is critical and depends on your circumstances.

Step 1: Determine Your Account Balance

Use the fair market value of each retirement account as of December 31 of the year before the distribution year. For a 2025 RMD, you would use the December 31, 2024 balance. Your account custodian (brokerage, bank, or plan administrator) will typically provide this figure on your year-end statement and often reports it to the IRS on Form 5498.

If you have multiple IRAs, you must calculate the RMD for each account separately. However, you may satisfy the total required amount by taking distributions from any one or combination of your IRA accounts. Employer-sponsored plans (401(k), 403(b)) are different — each plan's RMD must be taken from that specific plan; you cannot aggregate them with your IRAs.

Step 2: Choose the Correct Life Expectancy Table

The IRS publishes three tables in Appendix B of Publication 590-B. Choosing the right one depends on your situation:

• Table III — Uniform Lifetime Table: Used by almost all IRA owners for lifetime RMDs. This table assumes a hypothetical beneficiary who is 10 years younger than you, resulting in a slightly extended distribution period. Use this table if your spouse is not the sole beneficiary, or if your spouse is not more than 10 years younger than you.
• Table II — Joint Life and Last Survivor Expectancy Table: Used only when your spouse is the sole designated beneficiary of the IRA AND your spouse is more than 10 years younger than you. This produces a longer distribution period and lower annual RMDs, because the joint life expectancy of a couple with a large age gap is longer.
• Table I — Single Life Expectancy Table: Used primarily by beneficiaries of inherited IRAs to calculate their annual distributions.

Step 3: Find Your Life Expectancy Factor

From the appropriate table, look up the factor that corresponds to your age (or the joint ages for Table II) in the distribution year. The Uniform Lifetime Table factor for a 73-year-old is 26.5, meaning you must distribute approximately 3.77% of your account that year.

Step 4: Calculate the RMD

Divide the prior year-end balance by the life expectancy factor. The result is your minimum required distribution for the year. You may always withdraw more than the minimum, but excess withdrawals do not carry over to reduce future years' RMDs.

4. RMD Starting Age & Deadlines

The SECURE 2.0 Act of 2022 (signed into law December 29, 2022) changed the starting age for RMDs in a phased approach:

• Age 70½ — applied to anyone who reached 70½ on or before December 31, 2019.
• Age 72 — applied to those who turned 70½ after December 31, 2019 and reached age 72 by December 31, 2022.
• Age 73 — applies to individuals who turn 72 after December 31, 2022 and turn 73 before January 1, 2033. This includes those born in 1951–1959.
• Age 75 — applies to individuals who turn 74 after December 31, 2032 (those born 1960 or later).

Special note for those born in 1959: A technical ambiguity exists in SECURE 2.0 regarding whether those born in 1959 start RMDs at age 73 or 75. The IRS has issued proposed regulations that would set the age at 73 for those born in 1959, but this has not been finalized as of early 2026. Consult a tax advisor if you were born in 1959.

First RMD Grace Period

In the year you first become subject to RMDs, you have the option to delay your first withdrawal until April 1 of the following year. This is called the "Required Beginning Date" (RBD). For all subsequent years, RMDs must be taken by December 31.

5. IRS Life Expectancy Tables (Uniform Lifetime Table)

Below is the IRS Uniform Lifetime Table (Table III from IRS Publication 590-B), which is used by most IRA owners to calculate their annual RMDs. The table was updated in 2022 to reflect longer life expectancies, which reduced RMD amounts across all ages. This is the current table in effect.

Source: IRS Publication 590-B, Appendix B, Table III (Uniform Lifetime Table). The RMD percentage is calculated as 1 ÷ Distribution Period × 100.

6. Inherited IRA RMD Rules

Inherited IRA rules underwent a dramatic transformation with the SECURE Act of 2019 and were further refined by SECURE 2.0 (2022) and final IRS regulations issued in July 2024. The rules that apply to you depend critically on: (1) your relationship to the deceased owner, (2) whether the owner had started taking RMDs before death (i.e., had passed their Required Beginning Date), and (3) whether the account was inherited before or after January 1, 2020.

The Three Categories of Beneficiaries (Post-2019 Inheritances)

For IRAs inherited on or after January 1, 2020, beneficiaries fall into one of three categories, each with different distribution rules:

1. Eligible Designated Beneficiaries (EDBs)
These five special categories of beneficiaries may still use the "stretch" distribution method — taking annual RMDs based on their single life expectancy, potentially spreading distributions over many years:

• Surviving spouses — Have the most flexibility. Can roll the account into their own IRA (delaying RMDs until their own RBD), treat it as an inherited IRA, or (new under SECURE 2.0 proposed regulations) elect to be treated as the deceased spouse and delay RMDs until the year the deceased would have been required to start.
• Minor children of the account owner — Only biological or legally adopted children qualify (not grandchildren). They may stretch distributions using the Single Life Table until age 21, at which point the 10-year rule begins and they must deplete the account within 10 years of turning 21.
• Disabled individuals — Must meet IRS definitions of disability under Code Section 72(m)(7). Documentation requirements apply for employer plan accounts.
• Chronically ill individuals — Must meet IRS definitions. Documentation requirements apply for employer plan accounts.
• Individuals not more than 10 years younger than the owner — This includes beneficiaries who are older than the owner, the same age, or up to 10 years younger. For example, a sibling or a close-age friend.

2. Non-Eligible Designated Beneficiaries (NEDBs)
This is the most common category for adult children, grandchildren, and other individual beneficiaries who do not meet any of the five EDB criteria. NEDBs are subject to the 10-year rule. Crucially, the final IRS regulations confirmed: if the original owner died after their Required Beginning Date, the NEDB must take annual RMDs during the 10-year period and fully deplete the account by December 31 of the 10th year following the owner's death.

If the original owner died before their Required Beginning Date, the NEDB does not need to take annual RMDs during the 10-year period, but must fully deplete the account by the end of year 10.

3. Non-Designated Beneficiaries (NDBs)
Entities such as estates, charities, and non-qualifying trusts do not have life expectancies and receive the least favorable treatment. If the owner died after their RBD, distributions must be made over the owner's remaining life expectancy using the "ghost rule" (Single Life Table, owner's age in year of death, reduced by 1 each subsequent year). If the owner died before their RBD, the 5-year rule applies — the entire account must be distributed by December 31 of the 5th year following the owner's death.

Calculating the Annual RMD for Inherited IRAs

For EDBs using the stretch method, and for NEDBs taking annual RMDs during the 10-year period, the calculation uses the IRS Single Life Expectancy Table (Table I). The method is:

1. In the first year you take an RMD from the inherited IRA, look up your age in the year of the first distribution using the Single Life Table to get your initial factor.
2. Each subsequent year, reduce the factor by 1.0 (rather than re-looking it up for your new age). This is called the "fixed term" method.
3. Divide the prior December 31 balance by the current year's factor to get the RMD.

Exception for surviving spouses: If the surviving spouse chooses to remain as an EDB (not roll over into their own IRA), they may annually recalculate using their current age in the Single Life Table, which typically results in a slightly larger distribution period than the fixed-term method.

Pre-2020 Inherited IRAs (Pre-SECURE Act)

If you inherited an IRA before January 1, 2020, you continue to use the old rules — the stretch IRA method applies regardless of your relationship to the deceased. Annual RMDs are calculated using the Single Life Expectancy Table based on your age in the year following the owner's death, reduced by 1 each year thereafter. The 10-year rule does not apply to pre-2020 inheritances.

7. SECURE Act & SECURE 2.0: What Changed

Two major pieces of legislation in recent years fundamentally reshaped the RMD landscape:

The SECURE Act of 2019 (Setting Every Community Up for Retirement Enhancement)

Effective January 1, 2020, the original SECURE Act made two major changes:

• Raised the RMD starting age from 70½ to 72.
• Eliminated the "stretch IRA" for most non-spouse beneficiaries, replacing it with the 10-year rule. Only the five EDB categories retained stretch distribution rights.

SECURE 2.0 Act of 2022

SECURE 2.0 (signed December 29, 2022) further modified RMD rules:

• Age increase to 73 (and eventually 75): Phased the RMD starting age from 72 to 73 (for those born 1951–1959) and eventually to 75 (for those born 1960 or later).
• Penalty reduction: Reduced the excise tax for failing to take RMDs from 50% to 25%. If corrected within 2 years ("correction window"), the penalty drops to 10%.
• Roth 401(k) RMDs eliminated: Roth accounts in workplace plans are no longer subject to RMDs during the owner's lifetime, starting in 2024.
• New spousal election: Surviving spouses can elect to be treated as the deceased spouse for RMD purposes, delaying their own RBD to the year the deceased spouse would have reached their RBD age.
• QCD limit increase: The annual Qualified Charitable Distribution (QCD) limit was indexed to inflation and increased from $100,000 to $105,000 for 2024.

July 2024 Final IRS Regulations

After years of uncertainty and multiple penalty waivers, the IRS issued final regulations in July 2024 that clarified several key points, particularly that NEDBs subject to the 10-year rule must take annual RMDs during the 10-year period if the owner died after their RBD. These regulations are effective for distribution calendar years beginning on or after January 1, 2025.

8. Trust & Entity Beneficiary RMD Rules

Many people name trusts as IRA beneficiaries for estate planning reasons — to control how assets are distributed, to protect beneficiaries with special needs, or to minimize estate taxes. The RMD rules for trusts are among the most complex in all of retirement planning.

The Four Requirements for a "See-Through" Trust

A trust can qualify as a "see-through" or "look-through" trust, allowing the IRS to look through the trust and treat the individual trust beneficiaries as the designated beneficiaries. To qualify, the trust must meet all four requirements:

1. The trust must be a valid trust under state law (or would be but for the fact that there is no corpus).
2. The trust must be irrevocable, or will by its terms become irrevocable upon the death of the account owner.
3. The beneficiaries of the trust who are entitled to the trust's income must be identifiable from the trust document. All beneficiaries must themselves be individuals capable of serving as designated beneficiaries (generally, they must be people, not entities).
4. A copy of the trust document (or a list of beneficiaries with a commitment to provide the full document upon request) must be provided to the IRA custodian by October 31 of the year following the account owner's death.

Conduit Trusts vs. Accumulation Trusts

If a trust qualifies as a see-through trust, there are two main types, each with different distribution treatment:

Conduit Trust: The trust requires that all distributions received from the IRA are passed through immediately to the trust's current beneficiaries (not accumulated within the trust). Because the IRA distributions flow directly to individual beneficiaries, those individuals are treated as the designated beneficiaries. If the oldest beneficiary is an EDB, the trust can use that person's life expectancy.

Accumulation Trust: The trustee has discretion to accumulate (retain) distributions within the trust rather than immediately passing them to beneficiaries. This type is considered more complex under the SECURE Act. Because distributions can be accumulated in the trust, the IRS considers all potential beneficiaries — including contingent beneficiaries and remainder beneficiaries — when determining the designated beneficiary. For post-2019 deaths with non-EDB beneficiaries, accumulation trusts are subject to the 10-year rule (and annual RMDs if owner died after RBD).

Non-Qualifying Trusts, Estates, and Charities

If a trust does not meet the four see-through requirements, or if an estate or charity is the beneficiary, the trust/entity is treated as a Non-Designated Beneficiary (NDB). The rules are the strictest:

• If the owner died after their RBD: The "ghost rule" applies. RMDs are calculated based on the owner's remaining single life expectancy (as if the owner had lived), with the factor from the year of death reduced by 1 each subsequent year.
• If the owner died before their RBD: The five-year rule applies — the entire account must be distributed by December 31 of the fifth year after the owner's death.

Special Needs Trusts

Special Needs Trusts (SNTs) designed for a disabled or chronically ill beneficiary can qualify as an EDB trust if structured correctly. When the disabled or chronically ill beneficiary is the sole beneficiary of the trust, the trust can use that beneficiary's life expectancy for stretch distributions. Proper drafting is essential — consult an attorney specializing in both special needs planning and retirement accounts.

9. Penalties for Missing RMDs

The consequences of failing to take your full RMD by the deadline are severe. The IRS imposes an excise tax on the shortfall — the amount you should have withdrawn but did not.

• 25% excise tax on the amount not distributed as required.
• 10% reduced excise tax if you take the missed RMD within the "correction window" — generally within 2 years of when the excise tax would have applied, and you file Form 5329 to report the missed RMD.

Prior to SECURE 2.0, the penalty was a flat 50% — one of the highest in the entire tax code. The SECURE 2.0 reduction to 25% (and 10% with timely correction) was a significant relief.

To report a missed RMD and request the penalty waiver (which the IRS historically grants for first-time failures with a reasonable cause), file Form 5329 with your tax return and include a statement explaining the error and steps you have taken to correct it.

10. Planning Strategies to Reduce RMD Impact

For many retirees, RMDs force taxable income they may not need, can trigger higher Medicare premiums (IRMAA surcharges), and may cause Social Security benefits to be taxed at a higher rate. Several strategies can help reduce the burden:

Roth Conversions Before RMD Age

Converting Traditional IRA assets to a Roth IRA before you reach your Required Beginning Date (age 73 or 75) reduces the balance subject to future RMDs. You pay ordinary income tax on the converted amount in the year of conversion, but Roth accounts grow tax-free and are never subject to RMDs during your lifetime. This strategy is most powerful in the "gap years" between retirement and age 73, when your taxable income may be relatively low.

Qualified Charitable Distributions (QCDs)

Starting at age 70½ (note: this is earlier than the RMD starting age), you can make a Qualified Charitable Distribution directly from your IRA to a qualifying charity. For 2025, the annual QCD limit is indexed to inflation. A QCD satisfies your RMD requirement but is excluded from your taxable income — unlike a regular distribution that you then donate to charity (which would be taxable income and a deductible contribution, often less favorable due to the standard deduction). QCDs cannot be made to donor-advised funds or private foundations.

Still Working? Delay Workplace Plan RMDs

If you are still employed at a company and do not own 5% or more of that business, you may be able to delay RMDs from that employer's plan until you retire, even if you have reached your RMD starting age. This "still working" exception does not apply to IRAs or to prior employers' plans.

QLAC — Qualified Longevity Annuity Contract

You can use up to the lesser of $200,000 (indexed for inflation) or 25% of your retirement account balance to purchase a QLAC. Assets in a QLAC are excluded from the RMD calculation base until the annuity payments begin (which must start by age 85). This can defer RMDs and protect against outliving your assets.

Asset Location and Account Planning

Coordinating which assets are held in Traditional vs. Roth accounts can influence how much income is forced out via RMDs. Holding higher-growth assets in Roth accounts (no RMDs, tax-free growth) and more conservative assets in Traditional accounts (RMDs required, tax-deferred growth) can be an effective long-term strategy.

11. Frequently Asked Questions

Can I take my IRA RMD from a different account?

For Traditional IRAs, yes — you can aggregate the RMDs from all your IRAs and take the total from any one or combination of accounts. The same aggregation rule applies to 403(b) accounts. However, 401(k) RMDs must be taken from each specific 401(k) plan separately. You cannot use an IRA distribution to satisfy a 401(k) RMD, or vice versa.

What if I don't need the money — can I reinvest it?

You must take the distribution, but you are free to reinvest it in a taxable brokerage account, a Roth IRA (if you have earned income and meet the income limits), or anywhere else. You simply cannot keep it inside the same tax-deferred account.

Are Roth IRA beneficiaries subject to RMDs?

Yes. While the original Roth IRA owner is never required to take RMDs, beneficiaries who inherit a Roth IRA are subject to distribution rules. Inherited Roth IRAs for non-EDB beneficiaries are subject to the 10-year rule — but since qualified Roth distributions are tax-free, this is generally less burdensome. EDB beneficiaries can still stretch distributions over their life expectancy.

Do I pay taxes on my RMD?

Yes. Distributions from Traditional IRAs, 401(k)s, and other pre-tax retirement accounts are taxed as ordinary income in the year you receive them. There is no special capital gains rate for RMDs. If you made non-deductible contributions to your IRA (tracked on Form 8606), a pro-rata portion of each distribution may be tax-free.

What is the deadline for my first RMD?

Your first RMD must be taken by April 1 of the year after you reach your Required Beginning Date age (73 or 75). All subsequent annual RMDs must be taken by December 31 of each year.

What happens to my RMD if I die during the year?

If you die before taking your RMD for the year, your beneficiary must take the distribution. The full RMD for the year of death must be distributed by December 31 of that year (or the applicable deadline). Your beneficiary cannot roll this amount into their own IRA.

Can my spouse roll over my IRA after I die?

Yes. Surviving spouses have unique options not available to other beneficiaries. They can roll the inherited IRA into their own IRA, treating it as if it were always their own account (deferring RMDs until their own RBD age). Alternatively, they can remain as a beneficiary. The rollover option is generally most advantageous if the surviving spouse is younger, as it delays the start of RMDs.

What is a QCD and how does it help with RMDs?

A Qualified Charitable Distribution (QCD) is a direct transfer of funds from your IRA to a qualified charity. Individuals age 70½ or older can make QCDs up to the annual limit (adjusted for inflation, approximately $105,000 for 2024–2025). The QCD counts toward your RMD for the year but is excluded from your adjusted gross income (AGI), unlike a regular charitable deduction. Lower AGI means potentially lower Medicare Part B and D premiums (IRMAA) and a smaller portion of Social Security subject to tax.