Required Minimum Distributions (RMDs) are minimum amounts you must withdraw each year from most types of retirement accounts as mandated by the Internal Revenue Service (IRS).
Once you reach age 70½, you must begin taking these withdrawals annually, though you can always withdraw more. The assets you withdraw generally qualify as income, and you must pay federal and sometimes state taxes on distributions (i.e., on the pretax contributions and earnings).
RMDs are required from each of the following account types:
- IRAs (Traditional, Rollover, SEP, SAR-SEP, and SIMPLE)
- 403(b)s
RMDs are not required for owners of Roth IRAs including surviving spouses who roll over their Inherited Roth IRA assets into a Roth IRA of their own.
RMDs are also required from other types of employer-sponsored plans, which are not covered in depth here. You should contact your plan sponsor directly for RMD information if you have an account in any of the following types of plans:
- 401(k)
- Profit sharing
- Money purchase pension
- Governmental Section 457 deferred compensation
You usually must take your first RMD by April 1 of the year after you turn 70½—even if you have not yet retired. For each year thereafter, you must take an RMD by December 31.
For 403(b) accounts, the rules are the same as with IRAs, with one exception. If you are still working at age 70½ and have a 403(b) with your current employer, you may be able to delay distributions from that account only until April 1 of the year after you retire. RMDs for any other 403(b) accounts you have must begin by April 1 of the year after you turn 70½.
If you have assets in an employer-sponsored retirement plan and are still working for that employer at age 70½, you may be able to delay distributions from those employer plan account(s) until April 1 of the year after you retire.
Your RMD is based on your current age and your year-end account balance for the prior year.
Since both change every year, your RMD must be recalculated every year. Here's how to get started:
- Contact a T. Rowe Price Retirement Specialist at 888-421-0563 who can assist you with the calculation, or calculate it yourself by using our online calculator.
- Obtain your IRA year-end account balance(s) as of December 31 of the year prior to the calculation year.
Note: If you have assets “in transit” between retirement accounts on December 31, you must include those assets in the receiving account balance.
- Divide your account balance on December 31 of the previous year by your age-based factor for the calculation year. To find your age-based factor, use one of the following two tables, according to your situation:
- IRS Uniform Lifetime Table
For most account holders.
- Joint Life and Survivor Expectancy Table
Use this table only if your sole primary beneficiary on the account for the entire calculation year is your spouse and your spouse is more than 10 calendar years younger than you.
If you have multiple retirement accounts, you must calculate the appropriate RMD for each one. Once you determine your total RMD for an account type (i.e., IRA or 403(b)), you can take the combined amount from just one or more accounts of that type, if applicable, as long as you withdraw the total RMD amount each year.
Note: IRA and 403(b) accounts must be considered separately when determining your RMD total and making withdrawal decisions. If you have several IRAs, you may take your total IRA RMD from one IRA. If you have several 403(b)s, you may take your total 403(b) RMD from one 403(b) account. See the example below.
RMDs from each employer-sponsored plan such as a 401(k) must be considered separately. Employer plans also cannot be aggregated with IRA or 403(b) accounts for RMD purposes. You should contact your plan administrator for details.
If you have multiple accounts of the same type (IRAs, 403(b)) be sure to include all assets in your computations to ensure you satisfy IRS RMD requirements.
You may always take more from your account or accounts than is required—the RMD is simply a minimum requirement. Keep in mind, however, that taking more than the required amount early in retirement can reduce the assets available to cover future living expenses. A T. Rowe Price retirement specialist can help you develop a plan.
It is important to know that RMDs are not optional. These withdrawals are required, even if you don’t need the money.
If you don’t take your RMD or you take too little, an IRS penalty equal to 50% of the amount not distributed may apply.
If you don’t need the money now, click the link below to learn about other options, which include:
- Investing in a taxable account
- Contributing to a donor-advised fund account
- Contributing to a college savings plan
If you have a money purchase pension, profit sharing, and/or other qualified employer retirement plan account(s), your employer is responsible for making sure required minimum distributions take place.
However, you are still responsible for paying any penalties for missed or insufficient RMDs.
If you believe you’ve missed any RMD deadlines or have taken less than the RMD amount in any year, please speak with a tax advisor.
In most cases, the amount of your RMD will not be affected by your choice of beneficiary.
But for larger financial and estate planning purposes, the beneficiaries you select and the choices they make can have an impact on how much they ultimately receive.
We encourage you to discuss options with a T. Rowe Price Retirement Specialist at
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