What Are RMDs?
Required minimum distributions are the minimum amounts you must withdraw each year from traditional retirement accounts after reaching a certain age. These amounts are based on your account balance and life expectancy.
When RMDs Begin
RMD rules have changed in recent years, so confirm your starting age with the current IRS rules. Missing an RMD can trigger a penalty of up to 50% of the amount that should have been withdrawn.
How to Calculate RMDs
RMDs are calculated using the end-of-year account balance from the prior year and IRS life expectancy tables. Professional guidance is often helpful for complex retirement portfolios.
Avoiding Penalties
To avoid penalties, withdraw at least the required amount before the deadline. If you accidentally miss a distribution, contact your plan administrator and the IRS immediately.
Planning RMDs into Your Budget
RMDs can increase your taxable income, affecting tax brackets and Medicare premiums. Use our retirement calculators to plan the best timing and withdrawal amount.