Glossary
RMD
Required minimum distribution — the amount that generally must be withdrawn each year from most tax-deferred retirement accounts once the applicable age is reached.
Required minimum distribution — the amount that generally must be withdrawn each year from most tax-deferred retirement accounts once the applicable age is reached.
An RMD is generally the prior year-end account balance divided by an IRS life-expectancy factor, and its taxable portion is generally ordinary income; recovery of basis can change the taxable amount. Under ordinary SECURE 2.0 age-based rules, the starting age is generally 73 for people born in 1951–1959 and 75 for those born in 1960 or later; exceptions and beneficiary rules require separate review. IRA RMDs may be aggregated and taken from one or more IRAs. Employer-plan RMDs generally must be taken separately from each plan, with one exception: RMDs from multiple 403(b) accounts may be aggregated and taken from one 403(b). Roth IRAs require no distributions during the original owner’s lifetime.
Sources
- IRS — Required minimum distribution FAQs
- IRS Publication 590-B — IRA distributions, basis and Roth rules
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