Understanding RMDs & How They Affect Your Retirement & Estate Plan

The Required Minimum Distributions Hub

If you have retirement accounts like a 401(k), IRA, or other tax-deferred accounts, you cannot keep your money in them forever. Required Minimum Distributions (RMDs) are the government’s way of ensuring you eventually withdraw and pay taxes on your retirement savings.

RMD rules can be confusing, and failing to take them on time can result in steep penalties. This hub provides a high-level overview of what RMDs are, when they start, how they are calculated, and their impact on taxes, retirement, and estate planning.

Required Minimum Distributions Information Hub

Table of Contents

Key Things To Know

If you have a traditional IRA, 401(k), or other tax-deferred retirement account, you are required to start withdrawing funds at a certain age.

  • RMDs begin at age 73. If you turn 73 this year, you must take your first required withdrawal by April 1 of next year.
  • You must withdraw a minimum amount annually. The amount is based on your account balance and life expectancy, using IRS tables.
  • Skipping an RMD results in heavy penalties. If you fail to take your full RMD, the IRS may charge a 25% penalty on the amount you should have withdrawn.
  • RMDs are taxed as ordinary income. The more you withdraw, the higher your taxable income for the year.
  • Roth IRAs do not have RMDs. However, inherited Roth IRAs have separate distribution rules.
  • RMD rules apply to inherited retirement accounts. If you inherit an IRA or 401(k), different RMD rules may apply depending on your relationship to the original owner.

Frequently Asked Questions

RMD rules can significantly affect your taxes, retirement planning, and estate strategy. Knowing the basics can help you avoid costly mistakes and maximize your savings.

RMDs apply to:

  • Traditional IRAs
  • SEP IRAs & SIMPLE IRAs
  • 401(k), 403(b), and 457(b) plans
  • Other tax-deferred retirement accounts

Roth IRAs do not have RMDs during the original owner’s lifetime, but inherited Roth IRAs may require withdrawals.

As of 2025:

  • If you were born before 1951, you should already be taking RMDs.
  • If you were born between 1951 and 1959, you must start RMDs at age 73 under current law.
  • If you were born in 1960 or later, RMDs start at age 75 unless future legislation changes the rule.

The IRS determines your required withdrawal amount based on:

  • Your account balance at the end of last year
  • Your life expectancy factor from the IRS Uniform Lifetime Table

The larger your account balance, the higher your RMD. Some retirees strategically withdraw more than the minimum to manage taxes.

If you do not withdraw the full RMD amount, the IRS imposes a 25% penalty on the amount you should have withdrawn. This penalty can sometimes be reduced to 10% if corrected quickly.

Yes! Strategies include:

  • Qualified Charitable Distributions (QCDs): Donate up to $100,000 per year directly from your IRA to a charity to satisfy RMDs tax-free.
  • Spreading withdrawals strategically: Take withdrawals in lower-income years to reduce tax impact.
  • Converting to a Roth IRA: Roth conversions before RMD age can reduce taxable withdrawals later.

Your beneficiaries must follow inherited IRA RMD rules, which vary based on their relationship to you. Many heirs must withdraw all funds within 10 years, but certain beneficiaries, like spouses, may have different options.

Checklists, Guides, & Resources

Buried in Work offers a variety of checklists, guides, and other resources. Below are some of the most popular ones related to this information hub.

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Disclaimer: The information provided on this website and by Buried in Work is for general informational purposes only and should not be considered legal advice. Please consult with a qualified attorney or subject matter expert for advice specific to your situation.