A required minimum distribution is the smallest amount you must withdraw each year from tax-deferred retirement accounts like a traditional IRA or 401(k). Under SECURE 2.0, RMDs start at age 73 (75 if you were born in 1960 or later). The amount comes from last December 31 balance divided by the factor for your age in the IRS life-expectancy tables. You can take it monthly, quarterly, or all at once, the IRS only sets the deadline and the minimum.
When they start
Under SECURE 2.0, RMDs begin at age 73 for people born between 1951 and 1959. Born in 1960 or later, your RMD age is 75. Your first RMD is due by April 1 of the year after you reach that age, and every one after that is due by December 31. Delaying the first one to April 1 means two withdrawals land in the same tax year, and both count as taxable income that year.
How the yearly amount is figured
The IRS publishes life-expectancy tables in Publication 590-B. You find the factor for your age, then divide last December 31 balance by that factor. With round numbers: a $274,000 balance divided by a 27.4 factor gives a $10,000 RMD. The factor shrinks each year, so the required withdrawal grows as a share of the balance.
What counts, and what does not
RMDs apply to tax-deferred accounts like traditional IRAs, 401(k)s, 403(b)s, and 457(b)s. Roth IRAs have no RMDs while the original owner is alive. Withdrawals from tax-deferred accounts count as ordinary income in the year you take them, which is why the timing of other income matters in the same year.
The still-working exception, and what happens if you miss
If you are still working at 73, you can delay RMDs from your current employer's plan until you retire, if the plan allows it. IRA RMDs still start on schedule regardless. The IRS charges an excise tax on the amount you failed to withdraw, 25% of the shortfall under SECURE 2.0, dropping to 10% when you correct the mistake within two years.
Questions people ask me about this
Do RMDs apply to Roth IRAs?
No. Roth IRAs have no RMDs while the original owner is alive. Beneficiaries who inherit a Roth follow separate rules.
Are RMDs taxed?
Yes. Withdrawals from tax-deferred accounts count as ordinary income in the year you take them.
What if I am still working at 73?
You can delay RMDs from your current employer's plan until you retire, if the plan allows it. IRA RMDs still start at 73.