to see your Required Minimum Distribution.
Author: Elizabeth Prescott | Reviewed by: AnnuityJournal Editorial Team | Last updated: April 23, 2026
If you have money in a Traditional IRA, SEP IRA, or employer-sponsored retirement plan, the IRS requires you to start withdrawing a minimum amount each year once you reach a certain age. These withdrawals are called Required Minimum Distributions (RMDs), and failing to take them can trigger one of the steepest tax penalties in the entire tax code.
The calculator above estimates your RMD for the current year and projects future withdrawals over the next 10 years so you can plan ahead. Below, we break down the rules, the math, and the strategies that can save you money.
What Is a Required Minimum Distribution?
A Required Minimum Distribution (RMD) is the smallest amount the IRS forces you to withdraw from certain tax-deferred retirement accounts each year. The purpose is simple: the government gave you a tax break when you contributed, and RMDs ensure you eventually pay income tax on that money.
Your RMD amount depends on two things: your account balance as of December 31 of the prior year, and a life expectancy factor from the IRS Uniform Lifetime Table. The IRS updated these tables in 2022 to reflect longer life expectancies, which slightly reduced RMD amounts for most retirees.
For example, Margaret, age 74, has $350,000 in her Traditional IRA. Her IRS life expectancy factor is 25.5. Her RMD for the year is $350,000 / 25.5 = $13,725. She must withdraw at least that amount or face a stiff penalty.
Which Retirement Accounts Require RMDs?
RMDs apply to most tax-deferred retirement accounts. Here is the full list:
- Traditional IRAs – the most common account subject to RMDs
- SEP IRAs – used by self-employed individuals and small business owners
- SIMPLE IRAs – employer-sponsored plans for small businesses
- 401(k) plans – including traditional 401(k), solo 401(k), and safe harbor 401(k)
- 403(b) plans – used by teachers, nurses, and nonprofit employees
- 457(b) plans – government and certain nonprofit employer plans
- Profit-sharing plans – employer-funded retirement accounts
If you hold an annuity inside a Traditional IRA, the annuity is still subject to RMD rules. The RMD is calculated on the full account value, including the annuity contract value. This is an area where many retirees get tripped up, so read our annuity RMD rules guide for the specifics.
Which Accounts Are Exempt from RMDs?
Not every retirement account requires minimum distributions. These accounts are exempt:
- Roth IRAs – no RMDs during the account owner’s lifetime. This is one of the biggest advantages of Roth accounts.
- Roth 401(k) plans – starting in 2024, Roth 401(k) accounts are no longer subject to RMDs thanks to the SECURE Act 2.0. Previously, Roth 401(k) holders had to roll into a Roth IRA to avoid distributions.
- Health Savings Accounts (HSAs) – no RMDs, and withdrawals for qualified medical expenses are tax-free.
This is why many retirees use Roth conversions as a strategy to reduce future RMD obligations. By converting Traditional IRA funds to a Roth IRA before age 73, you permanently remove those dollars from RMD calculations.
At What Age Do RMDs Begin?
Under current law (SECURE Act 2.0), RMDs begin at age 73 for anyone born between 1951 and 1959. If you were born in 1960 or later, your RMD starting age increases to 75, beginning in 2033.
Here is the timeline:
- Born before 1951: RMDs started at age 72 (or 70.5 under the original rules)
- Born 1951 to 1959: RMDs begin at age 73
- Born 1960 or later: RMDs begin at age 75 (starting in 2033)
Your first RMD must be taken by April 1 of the year after you turn 73. Every subsequent RMD is due by December 31. Be careful with that first-year exception: if you delay your first RMD to April, you will need to take two RMDs in the same calendar year, which could push you into a higher tax bracket.
For retirees weighing when to start drawing down retirement accounts, the RMD start date is a critical planning milestone.
What Happens If You Miss Your RMD?
Missing an RMD triggers a 25% excise tax on the amount you should have withdrawn but did not. For a $15,000 RMD, that is a $3,750 penalty on top of the regular income tax you will owe when you eventually take the distribution.
The SECURE Act 2.0 reduced this penalty from 50% to 25%, which was a meaningful improvement. There is also a correction window: if you fix the missed RMD within two years, the penalty drops further to 10%. You will need to file IRS Form 5329 to report the shortfall and request the reduced penalty.
Common reasons retirees miss RMDs include forgetting about accounts at old employers, holding multiple IRAs and miscalculating the total, or not understanding that inherited IRAs have their own (often stricter) RMD schedules.
How Is Your RMD Calculated?
The RMD formula is straightforward: take your account balance as of December 31 of the prior year and divide it by the IRS life expectancy factor for your current age.
RMD = Prior Year-End Account Balance / IRS Life Expectancy Factor
The IRS publishes three life expectancy tables, but most retirees use the Uniform Lifetime Table. The only exception is if your sole beneficiary is a spouse who is more than 10 years younger, in which case you use the Joint Life and Last Survivor Table (which produces a smaller RMD).
Here is a real-world example. Robert, age 75, has the following retirement accounts:
- Traditional IRA #1: $220,000
- Traditional IRA #2: $130,000
- Old employer 401(k): $95,000
For his IRAs, Robert can combine the balances ($350,000) and take the total RMD from either account. His life expectancy factor at age 75 is 24.6. So his IRA RMD is $350,000 / 24.6 = $14,228.
His 401(k) RMD must be taken separately from that specific plan. The 401(k) RMD is $95,000 / 24.6 = $3,862.
Robert’s total RMD obligation for the year is $18,090. That entire amount will be taxed as ordinary income.
Can You Withdraw More Than Your RMD?
Yes. The RMD is a floor, not a ceiling. You can always withdraw more than the minimum. However, you cannot apply excess withdrawals in one year toward a future year’s RMD. Each year’s RMD is calculated independently based on that year’s account balance and your age.
Some retirees deliberately withdraw more than their RMD as part of a tax bracket management strategy. If you are in the 12% or 22% bracket, it may make sense to pull extra from your IRA now rather than face larger RMDs later when your balance has grown further.
Can You Reinvest Your RMD?
You can reinvest RMD proceeds, but not back into the tax-deferred account they came from. Once money comes out as an RMD, the IRS considers it distributed. You have several options for putting that money back to work:
- Taxable brokerage account – invest in stocks, bonds, or index funds with no contribution limits
- Fixed annuity or MYGA – lock in a guaranteed rate for 3 to 10 years using after-tax dollars
- High-yield savings account – park the cash if you need liquidity
- Roth IRA conversion – if you have earned income, you may be able to contribute to a Roth (but the RMD itself cannot be converted)
- Qualified Charitable Distribution (QCD) – if you are 70.5 or older, you can direct up to $105,000 per year from your IRA to a qualified charity, which counts toward your RMD but is excluded from taxable income
For retirees who do not need RMD cash for living expenses, using those funds to purchase a fixed annuity or MYGA outside the IRA can be a smart way to keep earning guaranteed interest without the RMD headache in future years.
RMD Strategies to Reduce Your Tax Bill
Several legitimate strategies can help you manage the tax impact of RMDs:
Qualified Charitable Distributions (QCDs): If you are charitably inclined and at least 70.5 years old, QCDs let you send IRA money directly to charity. The distribution satisfies your RMD but does not count as taxable income. This is one of the most powerful tax moves available to retirees.
Roth conversions before age 73: Converting Traditional IRA dollars to a Roth IRA in your 60s or early 70s reduces the balance subject to future RMDs. You pay tax on the conversion now, but the money grows tax-free in the Roth and is never subject to RMDs. Read more about the tax advantages of tax-deferred growth.
Consolidate accounts: If you have multiple IRAs, consider consolidating them. While you can satisfy your total IRA RMD from any single IRA, tracking multiple accounts increases the chance of a mistake.
Use your RMD strategically: If you need to rebalance your portfolio, use RMD withdrawals as an opportunity to sell overweight positions without triggering additional capital gains in a taxable account.
Frequently Asked Questions
What is a Required Minimum Distribution?
A Required Minimum Distribution (RMD) is the minimum amount the IRS requires you to withdraw each year from tax-deferred retirement accounts like Traditional IRAs, SEP IRAs, and 401(k) plans. The amount is based on your prior year-end account balance divided by an IRS life expectancy factor. RMDs ensure that tax-deferred retirement savings are eventually taxed as income.
At what age do RMDs begin?
Under current law, RMDs begin at age 73 for people born between 1951 and 1959. For those born in 1960 or later, the starting age increases to 75 beginning in 2033. Your first RMD must be taken by April 1 of the year following the year you turn 73 (or 75). All subsequent RMDs are due by December 31 each year.
What happens if I don’t take my RMD?
If you fail to take your full RMD by the deadline, the IRS imposes a 25% excise tax on the amount you should have withdrawn. The SECURE Act 2.0 reduced this from the previous 50% penalty. If you correct the missed RMD within two years, the penalty drops to 10%. You must file IRS Form 5329 to report and resolve the shortfall.
How is my RMD calculated?
Your RMD equals your retirement account balance as of December 31 of the prior year, divided by the IRS life expectancy factor for your current age. Most retirees use the Uniform Lifetime Table. For example, a 74-year-old with a $300,000 IRA balance would divide $300,000 by 25.5 (the factor for age 74), resulting in an RMD of approximately $11,765.
Can I reinvest my RMD?
Yes, but not back into the tax-deferred account it came from. Once you take an RMD, you can invest the after-tax proceeds in a brokerage account, a fixed annuity, a high-yield savings account, or other vehicles. If you are 70.5 or older, you can also use a Qualified Charitable Distribution (QCD) to send up to $105,000 per year from your IRA directly to charity, which satisfies your RMD and is excluded from taxable income.
Explore more annuity calculators to help plan your retirement, or visit our tax strategies hub for tips on managing retirement income taxes.