Question 1

What is a Required Minimum Distribution (RMD)?

Accepted Answer

A Required Minimum Distribution (RMD) is the minimum amount you must withdraw from your tax-deferred retirement accounts each year once you reach a certain age. RMDs apply to Traditional IRAs, 401(k)s, 403(b)s, and other pre-tax retirement accounts. The purpose is to ensure these tax-deferred funds are eventually taxed as income. Roth IRAs do not require RMDs during the owner's lifetime.

Question 2

At what age do RMDs begin?

Accepted Answer

Under the SECURE 2.0 Act, if you turned 73 in 2023 or later, your RMDs begin at age 73. Starting in 2033, the RMD age increases to 75. If you turned 72 before 2023, your RMDs already started at age 72. You must take your first RMD by April 1 of the year after you turn the applicable age, and by December 31 for each subsequent year.

Question 3

How are RMDs calculated?

Accepted Answer

Your RMD is calculated by dividing your account balance as of December 31 of the previous year by a life expectancy factor from the IRS Uniform Lifetime Table. For example, at age 73, the factor is 26.5, so a $500,000 account would require an RMD of $500,000 / 26.5 = $18,868. A different table (Joint Life and Last Survivor) may apply if your sole beneficiary is a spouse more than 10 years younger.

Question 4

What happens if I don't take my RMD?

Accepted Answer

If you fail to take your full RMD by the deadline, the IRS imposes an excise tax of 25% on the amount not distributed (reduced from 50% by SECURE 2.0). This penalty can be reduced to 10% if corrected within a correction window. For example, missing a $20,000 RMD could result in a $5,000 penalty. It's critical to take your full RMD each year.

Question 5

Can I withdraw more than my RMD?

Accepted Answer

Yes, you can always withdraw more than your RMD. However, any amount above the RMD cannot be counted toward future years' RMDs. Extra withdrawals are still taxed as ordinary income. Some retirees choose to withdraw more than the RMD to manage their tax brackets strategically or to convert excess amounts to a Roth IRA.

Age	Factor	RMD	Est. Tax	Remaining Balance
73	26.5	$18,868	$4,150.96	$505,189
74	25.5	$19,811	$4,358.42	$509,646
75	24.6	$20,717	$4,557.74	$513,375
76	23.7	$21,661	$4,765.42	$516,300
77	22.9	$22,546	$4,960.12	$518,441
78	22.0	$23,566	$5,184.52	$519,620
79	21.1	$24,627	$5,417.94	$519,743
80	20.2	$25,730	$5,660.6	$518,714
81	19.4	$26,738	$5,882.36	$516,575
82	18.5	$27,923	$6,143.06	$513,084
83	17.7	$28,988	$6,377.36	$508,301
84	16.8	$30,256	$6,656.32	$501,948
85	16.0	$31,372	$6,901.84	$494,105
86	15.2	$32,507	$7,151.54	$484,678
87	14.4	$33,658	$7,404.76	$473,570

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