Required Minimum Distribution (RMD)
retirementAlso known as: RMD, required minimum distribution
Updated · Written and reviewed by Konstantin Iakovlev
Detailed explanation
RMD amount = account balance December 31 prior year ÷ life-expectancy factor from IRS Uniform Lifetime Table (or Joint Life if spouse is sole beneficiary >10 years younger). At age 73, the divisor is 26.5, so a $500K IRA owner takes ~$18,868 the first year. RMDs increase as you age. Roth IRAs have NO RMDs during the original owner's lifetime (unique advantage). Roth 401(k)s previously had RMDs but SECURE 2.0 eliminated them effective 2024. Inherited IRAs have separate RMD rules: most non-spouse beneficiaries must drain the account within 10 years.
Use these calculators to apply this concept
Related retirement terms
401(k)
A 401(k) is an employer-sponsored retirement savings plan with substantial tax benefits. 2026 contribution limit is $24,...
Roth IRA
A Roth IRA is an individual retirement account funded with after-tax dollars; qualified withdrawals are 100% tax-free. 2...
Social Security
Social Security is the U.S. federal retirement insurance program, funded by FICA payroll taxes. Workers earn benefits ov...
Full Retirement Age (FRA)
Full Retirement Age (FRA) is the age at which you receive 100% of your Social Security benefit. For workers born 1960 or...
SEP-IRA
A SEP-IRA (Simplified Employee Pension) is a retirement account for self-employed individuals and small businesses. 2026...
← Back to glossary · Suggest an addition: [email protected]