Required Minimum Distributions

What exactly is a required minimum distribution?

A required minimum distribution (RMD) is a required amount of money that must be withdrawn from traditional IRAs or employer-sponsored retirement plans every year. You are required to begin taking RMDs at the age of 72.

What accounts do RMD rules apply to?

How Do I calculate an RMD?

Step 1: Visit the IRS website and navigate to the IRS Publication 590. This has the most up to date RMD tables that are needed to calculate your RMD. 

Step 2: Find your current age on the IRS Uniform Lifetime Table and the Life Expectancy Factor that corresponds to your age 

Step 3: Take your retirement account balance as of December 31 of the prior year and divide it by your current life expectancy factor. 

Step 4: That equates to your RMD for the year.  

Required Minimum Distributions

How are RMDs taxed?

RMDs are taxed as normal income for the year in which you take it if all your IRA contributions were tax-deductible when you made them. If nondeductible contributions were made then some of the amount will not be subjects to income taxes. The IRS Form 8606 can help to calculate the amount that will be non-taxable.  

There are a few strategies to avoid paying taxes on RMD payments. One strategy is to donate to some of your distributions to a qualified charity. Qualified charities accept transfers from an IRA account to an eligible nonprofit organization. These distributions are not taxable but can be counted towards your RMDs for the year. The maximum that can be donated is $100,000. Another strategy is to continue working longer. If you are 72 or older and still working and contributing to an employer’s 401(k) the IRS allows you to defer taking RMDs.  


Frequently Asked Questions


Under the 2019 legislation, you should have taken your first RMD by April 1, 2020, if you turned 70 ½ in 2019 . If you turned 70 ½ in 2020 or later, you should take your first RMD by April 1 of the year after you turn 72. All further RMDs must be taken by December 31 of each year

  • Yes, even if you continue working past age 72,* you will need to take an RMD from your IRA. However, if you’re still working, you may qualify for an exception from taking RMDs from your current employer-sponsored retirement account (i.e. a 401(k), 403(b), or small-business account).

* The change in the RMD age requirement from 70½ to 72 only applies to individuals who turn 70½ on or after January 1, 2020.

  • If you are the original account owner, you do not have to take RMDs from a Roth IRA. However, you will have to follow RMD rules if you have inherited a Roth IRA.

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