Required Minimum Distributions: The Retirement Withdrawal the IRS Won't Let You Skip

The tax code let you defer tax on your traditional IRA, 401(k), or SEP for decades. Eventually it wants its cut, and it enforces that with one of the steeper penalties on the books: miss a required minimum distribution (RMD) and the excise tax is 25% of the amount you should have taken — reduced to 10% if you correct it promptly within the window the rules allow.

When RMDs start now

The starting age has moved twice in recent years, and I still see people working off the old 70½ rule. Under current law:

If you were born 1951 through 1959, your RMDs begin at age 73.
If you were born 1960 or later, they begin at age 75.

Your first RMD can be delayed until April 1 of the year after your starting year — but that means taking two distributions in that second year, which stacks income and may push you into a higher bracket. Whether the delay helps is a math problem, not a guess.

How the amount is figured

Each year's RMD is the prior December 31 account balance divided by the life-expectancy factor from the IRS Uniform Lifetime Table for your age. The calculation runs separately by plan type: taking extra from your IRA does not satisfy the RMD on your 401(k). And withdrawing more than required this year earns you no credit against next year's amount — it only reduces the balance the next calculation starts from.

What doesn't have an RMD

Roth IRAs have no lifetime RMDs for the owner, and under current law designated Roth accounts in 401(k)-type plans no longer do either. There's also a "still working" exception that can let you delay RMDs from your current employer's plan (not IRAs, and not if you own more than 5% of the company).

A smarter way to take it

If you're charitably inclined, a qualified charitable distribution — sent directly from your IRA to the charity — counts toward your RMD and stays out of your income entirely, up to an annual limit that's now well over $100,000 and indexed for inflation. For many retirees that beats a deduction they can't itemize for anyway.

RMD mistakes are common, expensive, and — caught early — usually fixable. If you've missed one, or you're staring at your first RMD year and want the timing done right, attach your statements with the paperclip in the chat and we'll scope and quote the work in writing after intake. The free sample chapter of my Guide is at /book.