The short answer
Required minimum distributions, or RMDs, are amounts you must withdraw each year from most tax-deferred retirement accounts once you reach the required age. Because these withdrawals are taxable, they can raise your income and affect your tax bracket and income-based costs like Medicare premiums. The required beginning age has changed under recent laws, and missing an RMD can trigger a penalty, so knowing your age, deadline, and how the amount is calculated is important. This is educational information, not tax advice.
So RMDs are mandatory taxable withdrawals from tax-deferred accounts starting at a set age, and missing them carries a penalty.
How RMDs work
The RMD amount is generally calculated by dividing each account's year-end balance by a life-expectancy factor from IRS tables. RMDs apply to traditional IRAs and most employer plans, but not to Roth IRAs during the original owner's lifetime. Your first RMD has a special deadline, and subsequent ones are due by year-end. Because RMDs are taxable income, they interact with other planning like IRMAA. Our guide to RMDs and IRMAA covers that Medicare-premium connection, and our guide to annuity RMD rules covers annuities in retirement accounts.
The calculation uses your balance and an IRS life-expectancy factor, and Roth IRAs are exempt during the owner's lifetime.
Deadlines and penalties
You generally must take each year's RMD by December 31, with a special later deadline allowed for your very first RMD. Failing to take the full amount can result in a tax penalty on the shortfall, though the penalty may be reduced if corrected promptly. Planning withdrawals ahead, and considering strategies like qualified charitable distributions, can soften the tax impact. Because the rules and ages have changed, confirm the current requirements with a tax professional. Our retirement income guide covers planning around RMDs.
The takeaway: take your full RMD by the deadline each year to avoid a penalty, and plan for the taxable income it creates. This is educational information, not tax advice.
Frequently Asked Questions
What is a required minimum distribution?
An amount you must withdraw each year from most tax-deferred retirement accounts once you reach the required age. The withdrawals are taxable and calculated from your balance and an IRS life-expectancy factor.
When do I have to take RMDs?
Starting at the required beginning age, which has changed under recent laws. Each year's RMD is generally due by December 31, with a special later deadline allowed for your first one.
What happens if I miss an RMD?
Failing to take the full amount can trigger a tax penalty on the shortfall, though it may be reduced if corrected promptly. Confirm current rules with a tax professional.
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