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What To Know About Required Minimum Distributions

| January 01, 2024

Your 70s represent a time to enjoy the fruits of your labor, but there’s still work to do. When you turn 73, you’ll need to start taking one of the more complex and time-consuming aspects of managing your retirement income: required minimum distributions (RMDs).

Let's start with the basics:

 What are required minimum distributions?

A required minimum distribution is the minimum amount you must withdraw from your tax-advantaged retirement account(s) each year, including IRAs (traditional, SEP, and SIMPLE), 401(k)s, and 403(b)s when you reach age 73. You aren’t required to take RMDs from Roth IRAs during your lifetime.

 When do you have to begin withdrawing money?

IRS regulations require you to begin withdrawing a minimum amount of money from your retirement account(s) each year by April 1 of the calendar year following the year you turn age 73. After that, RMDs must be taken each subsequent calendar year by December 31.

 Why is this information important to you?

Calculating the correct RMD amount(s) across one or multiple retirement accounts is complicated. If you miscalculate or fail to take RMDs from one or more qualified plans, you can be vulnerable to hefty tax penalties.

Here’s what you need to know when calculating your RMDs:

For some types of retirement accounts—including IRAs and 403(b)s—you can combine the total RMD amount from the same type of account and withdraw that amount from one or more accounts. However, you are not allowed to withdraw an RMD for an IRA from a 403(b) account or take a 403(b) requirement minimum distribution from an IRA account. For others—such as 401(k) and 457(b)—you must withdraw the RMD from each account separately.

As the account owner, you’re responsible for taking the correct RMD on time annually. That includes knowing which plans qualify, starting on the correct date, and completing the required IRS worksheet(s).

Your plan custodian or administrator may calculate the RMD amount. This is done by dividing the prior December 31 balance of the account by a life expectancy provided in the IRS tables in Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs).

Your life expectancy is based on your situation:

- Joint and Last Survivor Table—if the sole beneficiary of the account is your spouse who is more than 10 years younger than you

- Uniform Lifetime Table—if your spouse is not your sole beneficiary or is not more than 10 years younger than you

- Single Life Expectancy Table—if you are a beneficiary of an account (an inherited IRA)

If this sounds complex, that’s because it is—but it doesn’t have to be. Remember: You have help available to calculate the correct annual RMD amount across your retirement accounts. If you’re interested in learning more about strategies to minimize the burden of managing RMDs, contact the office today to schedule an appointment.


This communication is designed to provide accurate and authoritative information on the subjects covered. It is not however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.