Required Minimum Distribution (RMD)

Required Minimum Distributions (RMDs) are mandatory annual withdrawals from Traditional IRAs and 401(k)s that begin in the year you turn 73 (under the SECURE 2.0 Act of 2022; rising to 75 in 2033).

How the RMD is calculated

RMD for year N = (account balance as of December 31 of year N-1) ÷ (IRS Uniform Lifetime Table divisor)

The divisor decreases each year as life expectancy shortens, so the percentage of the account that must be withdrawn grows. At 73, the divisor is ~27, meaning roughly 3.7% of the account. At 90, the divisor is ~12, meaning ~8.3%.

Penalty for missing

Pre-SECURE 2.0, missing an RMD cost 50% of the missed amount. Post-SECURE 2.0, it's 25%, reduced to 10% if corrected within 2 years.

Roth IRAs exempt

Roth IRAs have no lifetime RMDs (Roth 401(k)s did, but SECURE 2.0 eliminated that starting 2024). This is why Roth conversions are powerful — they reduce future forced distributions.

Qualified Charitable Distributions (QCDs)

If you're 70.5+, you can direct up to $108,000/year (2026, indexed) directly from your IRA to a qualifying charity. The QCD counts toward your RMD but is excluded from taxable income. For charitably inclined retirees, this is often the most tax-efficient way to give.

Inherited IRAs

The SECURE Act of 2019 mostly eliminated the "stretch IRA." Most non-spouse beneficiaries must drain the inherited IRA over 10 years. Combined with RMDs and pre-tax IRA balances, this makes Roth conversions during life one of the highest-impact estate-planning moves.