Frequently Asked Questions
When do I need to start taking RMDs?
Under SECURE 2.0, RMDs begin at age 73 for those born 1951-1959, and age 75 for those born 1960 or later. The first RMD must be taken by April 1 of the year after you turn 73/75.
What is the penalty for not taking an RMD?
The penalty for missing an RMD was reduced by SECURE 2.0 from 50% to 25% of the amount not withdrawn. If corrected within the correction window, it may be reduced to 10%.
Which accounts require RMDs?
RMDs apply to Traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, and other tax-deferred retirement accounts. Roth IRAs do NOT require RMDs during the owner's lifetime. Roth 401(k)s no longer require RMDs as of 2024.
How is the RMD amount calculated?
Your RMD is calculated by dividing your account balance (as of December 31 of the prior year) by the IRS life expectancy factor from the Uniform Lifetime Table. For example, at age 73, the factor is 26.5, so a $500,000 balance requires a $18,868 RMD.
Can I withdraw more than the RMD?
Yes, you can always withdraw more than the RMD. The RMD is the minimum you must take — there's no maximum. Withdrawing extra may push you into a higher tax bracket, so consider your overall tax situation and consult a tax advisor.
Can I take my first RMD in two parts?
Yes. Your first RMD (the year you turn 73/75) can be taken by April 1 of the following year. But if you wait, you'll need two RMDs in that year — your first (for the prior year) and your second (for the current year). This could push you into a higher tax bracket.