Required minimum distributions: what they mean for you

Money in tax-deferred accounts, such as a traditional IRA or 401(k), can’t stay there forever. From a certain age, you must take out a minimum amount each year. That amount is a required minimum distribution, or RMD.

When they start. At 73 for anyone born from 1951 to 1959, and at 75 for anyone born in 1960 or later. Roth IRAs and Roth 401(k)s have no RMDs for the original owner.

How much. Each year’s amount is last year’s ending balance divided by a factor from an IRS table. The share you must take grows a little each year.

Why they matter. Withdrawals count as taxable income. A large one can raise your tax bracket, the tax on your Social Security and your Medicare premiums. Missing one brings a steep penalty.

Plan ahead. Knowing what’s coming years in advance gives you time to choose how and when to draw from your accounts.

See your own estimate. Our free RMD estimator shows your first required withdrawal in seconds. Join the waitlist to see it inside your full plan.