What Is an RMD?
Updated September 2026 · Figures based on current IRS rules (SECURE Act and SECURE 2.0)
RMD stands for required minimum distribution: the minimum amount the IRS requires you to withdraw each year from tax-deferred retirement accounts, such as traditional IRAs and 401(k)s, once you reach RMD age (73, or 75 if born in 1960 or later).
Why RMDs exist
Money in a traditional IRA or 401(k) went in before tax and has grown without being taxed. RMDs make sure the government eventually collects income tax on it, rather than letting the money stay sheltered forever and pass to heirs untaxed.
RMD meaning in plain English
- Required: it's not optional. Missing it triggers a 25% penalty on the shortfall.
- Minimum: it's the floor. You can always take more.
- Distribution: a withdrawal from your retirement account, taxed as ordinary income.
How much is an RMD?
It's your account balance at the end of last year divided by an IRS life-expectancy factor. At 73 that works out to about 3.8% of the balance, at 80 about 5% and at 90 about 8.2%. Use the RMD calculator or see the RMD table.
Which accounts have RMDs?
Traditional IRAs, SEP and SIMPLE IRAs, 401(k), 403(b), 457(b) and similar employer plans. Roth IRAs and Roth 401(k)s have no RMDs for the original owner. Inherited accounts have their own rules.
When do RMDs start?
In the year you reach your RMD age. The first can be delayed to April 1 of the following year; after that, the deadline is December 31 every year. See when RMDs start.
What happens to the money?
Whatever you like. You pay income tax on it, but you can spend it, save it in a bank or reinvest it in a taxable brokerage account. What you can't do is put it back into a retirement account. If you're charitably minded, a qualified charitable distribution lets you send IRA money straight to charity and have it count toward your RMD tax-free.
Key rules to remember
Deadlines, penalties, which account to withdraw from and the exceptions are all covered in RMD rules.
Frequently asked questions
What does RMD stand for?
Required minimum distribution.
Is an RMD mandatory?
Yes. Missing it triggers a 25% excise tax on the amount not withdrawn, reduced to 10% if corrected promptly.
Are RMDs taxed?
Yes, as ordinary income, except for qualified Roth amounts and qualified charitable distributions.
What does RMD mean for a 401(k)?
The same as for an IRA: a yearly minimum withdrawal once you reach RMD age, unless you're still working for that employer and own 5% or less of it.