The definition, precisely
A required minimum distribution is the minimum annual withdrawal §401(a)(9) requires from traditional IRAs, 401(k)s, 403(b)s, and similar pre-tax accounts once the owner reaches the statutory age — 73 for those born 1951–1959, 75 for 1960 and later. Each year's RMD equals the prior December 31 balance divided by the distribution period from the IRS Uniform Lifetime Table. Still working past the age with a current-employer 401(k)? That plan's RMD waits until retirement — IRAs get no such delay.
How the RMD actually works
The table does the work: at 73 the factor is about 26.5, so roughly 3.8% must leave; by 85 the factor shrinks toward 16 and the percentage doubles. Owners with multiple IRAs compute each account's RMD but may withdraw the total from any of them; 401(k) RMDs stay per-plan. The first RMD may defer to April 1 of the next year — a trap for the unwary, since two distributions then stack into one year's income, often pushing Medicare premiums and bracket edges. Qualified charitable distributions (up to the indexed cap, directly to charity) satisfy the RMD without touching AGI.
The fine print
The 25% penalty applies to whatever should have come out but didn't — and the IRS grants relief freely for reasonable error corrected quickly, via Form 5329 with a waiver request. Roth IRAs never impose lifetime RMDs on the owner, which is half the Roth conversion argument for people approaching 73. Beneficiaries play by different rules entirely: most non-spouse heirs now face the 10-year empty-the-account rule, not lifetime stretch tables.
Frequently Asked Questions
- 73 if born 1951–1959, 75 if born 1960 or later, under SECURE 2.0. The first RMD can wait until April 1 of the following year — but then two distributions land in one tax year.
- Prior December 31 balance divided by the IRS Uniform Lifetime Table factor for your age. A $1M balance at 73 divides by roughly 26.5 — about $37,700 that must come out.
- 25% of the shortfall under SECURE 2.0 (down from 50%), dropping to 10% if corrected promptly. The IRS routinely waives it for reasonable error with a timely fix — file Form 5329 and ask.
- No — never for the original owner. SECURE 2.0 also ended RMDs for Roth 401(k)s. Inherited Roth IRAs follow the beneficiary rules instead, but the owner's lifetime is RMD-free.