Required Minimum Distribution (RMD)

Full explanation

RMDs are mandatory annual withdrawals from tax-deferred retirement accounts (traditional IRAs, 401(k)s, 403(b)s, 457s, SEP IRAs, SIMPLE IRAs). You must begin RMDs by April 1 of the year after you turn 73 (raised from 72 by SECURE 2.0 Act). The amount is calculated by dividing your account balance (as of December 31 of the prior year) by an IRS life expectancy factor from the Uniform Lifetime Table. Roth IRAs do NOT require RMDs during the owner's lifetime. Roth 401(k)s also no longer require RMDs starting 2024. Penalty for missing an RMD: 25% of the amount not withdrawn (reduced from 50% by SECURE 2.0), or 10% if corrected within 2 years.

Source: IRS Publication 590-B — Distributions from IRAs