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Getting Started With Required Minimum Distributions

Learn the basics about starting and managing required minimum distributions (RMDs)

What are Required Minimum Distributions (RMDs)?

When you reach age 73¹, the IRS requires you to begin annual withdrawals from most retirement accounts (excluding Roth IRAs). These withdrawals are called required minimum distributions, or RMDs, and are generally included in your taxable income.

It's important to keep track of your RMDs and rules that may change. Each year's RMD must be taken by December 31, with the exception of your first year RMD. If you don't take them on time, or if you take less than the full amount, you may have to pay an IRS penalty tax.

We encourage you to set up an automatic withdrawal plan so you don't miss an RMD. You also have the option to keep your money working for you by reinvesting your withdrawal. Give us a call today to automate your RMDs.

Ready to make a withdrawal?

Learn more based on your account type.

What happens if you don’t take an RMD?

If you do not take your RMD by the deadline, or if the amount you take is not large enough, you may have to pay an IRS penalty tax on the amount not distributed as required. Effective January 1, 2023, the SECURE 2.0 Act lowered the IRS penalty tax from 50% to 25%, and allows a further reduction to 10% if you correct the RMD in a timely manner (generally within two years). You may be able to have the penalty waived altogether if you can prove to the IRS that the shortfall was due to reasonable error and steps have been taken to correct it.

If you have missed taking an RMD, we encourage you to contact your tax advisor to discuss your options.

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What Accounts Require RMDs?

RMDs are required for the following accounts:

  • Traditional, Rollover, SEP, SARSEP and SIMPLE IRAs

  • 403(b), governmental 457(b) and qualified retirement accounts

  • Designated Roth accounts in a 401(k), 403(b) and governmental 457(b) through 2023.
    Beginning in 2024, RMDs are not required. First-year RMDs for 2023 that are not due until April 1, 2024, must still be withdrawn.

  • Beneficiary accounts of one of the above account types have rules specific to inherited assets. Download the Distribution Options for details.

Note that RMDs are not required for Roth IRAs during the owner’s lifetime.

When is the deadline for taking RMDs?

Generally speaking, each year's RMD must be taken by December 31.

  • First Year (Age 73)
    Withdraw your first year RMD no later than April 1 of the year following the year you turn 73.

  • Subsequent Years
    Withdraw your RMD by December 31.

If you participate in a qualified retirement plan and own at least 5% of the company, the IRA deadlines shown above apply.

If you do not own at least 5%, or if you participate in a 403(b) or governmental 457(b), you will need to check with your employer to determine if the plan’s terms require you to begin taking RMDs when you reach RMD age or if you can wait until you retire. If the plan does not allow you to wait until retirement, the IRA deadlines shown above apply.

How is an RMD calculated?

Generally, a RMD is calculated for each account by dividing the prior December 31 balance of that account by a life expectancy factor that the IRS publishes in tables in Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs).

Although IRS rules require a minimum distribution amount, you can take more than the RMD if you need the extra income.2 Any distribution is generally subject to taxes; therefore, please be sure to talk to your tax advisor about your needs as you plan your RMD.

If your RMD amount isn't shown on your account statement, call us and we’ll calculate it for you.3

Your RMD is calculated for each account, but you may be able to aggregate RMDs for the withdrawal. For IRA RMDs, you may withdraw the entire amount from a single IRA or take a portion from multiple IRAs. The same is true for 403(b)s, as long as they have the same plan sponsor. For other types of plans, such as 401(k) and 457(b), you usually have to withdraw the RMD from each account.

To calculate your RMD, first find your December 31 age in the left columns of the IRS Uniform Lifetime Table to determine your life expectancy factor. Then, divide your prior year's December 31 plan value by your life expectancy factor. Each year you will use a new life expectancy factor and the prior year's December 31 value.

Age on 12/31 of Distribution Year & Required Distribution Period (Years):

Age 73-83

Age 84-95

Age 96-107

Age 108+

73: 26.5

84:  16.8

96:  8.4

108: 3.9

74:  25.6

85:  16.0

97:  7.8

109: 3.7

75:  24.6

86:  15.2

98:  7.3

110: 3.5

76:  23.7

87:  14.4

99:  6.8

111: 3.4

77:  22.9

88:  13.7

100:  6.4

112: 3.3

78:  22.0

89:  12.9

101:  6.0

113: 3.1

79:  21.1

90:  12.2

102:  5.6

114: 3.0

80:  20.2

91:  11.5

103:  5.2

115: 2.9

81:  19.4

92:  10.8

104:  4.9

116: 2.8

82:  18.5

93:  10.1

105:  4.6

117: 2.7

83:  17.7

94:  9.5

106: 4.3

118: 2.5

95:  8.9

107: 4.1

119: 2.3

120 and over: 2.0

Source: Internal Revenue Service, as of 1/1/2023.

Note: If your spouse was your sole beneficiary for the entire calendar year and your spouse is more than 10 years younger than you, you can use the IRS joint life expectancy table, which may reduce your RMD amount. You will need to let us know if you want us to use the joint life expectancy table in our calculations.

What can I do with my RMD?

Are your expenses covered for the year, and you don’t need the RMD money right now? The money doesn’t have to sit in a checking or low-yielding savings account. Here are some ways to put that RMD to work for the future.

You can invest an RMD in a taxable investment account.

RMDs can’t be rolled over to retirement accounts, but if you are still working, you can make an annual contribution to a Traditional or Roth IRA (subject to eligibility requirements). The RMD withdrawal is still considered taxable income in the year you take it, even if you put money back into a Traditional IRA as an annual contribution. However, reinvesting in a Traditional or Roth may have tax advantages, plus Roth IRAs have no RMDs during your lifetime. Again, it’s important to seek guidance from your tax advisor.

As always, we can help you choose investments that match your goals.

Your RMD may be an excellent resource for funding a tax-deferred 529 education savings plan for a loved one. RMDs are taxable distributions, and if you invest them in another taxable account, the money will continue to be subject to taxes. But put in a 529, the money has the potential to grow tax deferred and withdrawals for qualified education expenses would be tax free.4

The higher the balance in your tax-deferred accounts, the higher your RMD and perhaps your tax bracket. But if you're over age 70½ and your RMD is from an IRA5 you can reduce your tax burden by having your RMD check issued directly to a qualified charity of your choice—up to $100,000 per year is tax free. This is called a qualified charitable distribution (QCD).

How do I request my RMD withdrawal?

To withdraw your RMD, you can call us (IRAs only), log in or use one of the forms below.

Traditional/Rollover IRAs


Workplace Retirement Plans



403(b) Plans

457(b) Plans

Qualified Retirement Plans

Brokerage IRAs

(Traditional/Rollover/SEP/SIMPLE IRAs)

Need help with your RMD?

We’re here to help.

The SECURE Act raised the RMD age from 70½ to 72 for individuals born after 6/30/1949. The SECURE 2.0 Act then raised the RMD age to 73 for individuals born in 1951-1959, and 75 for those born in 1960 or later.

For 403(b), governmental 457(b) and qualified retirement plan accounts, a second qualifying event is required to withdraw an amount greater than the RMD amount.

Not available for some qualified retirement plan accounts.

The earnings portion of non-qualified withdrawals is subject to federal and state income taxes and a 10% federal penalty.

Available for Traditional/Rollover IRAs. Available for SEP, SARSEP and SIMPLE IRAs under certain circumstances. Not available for other workplace retirement plans.

Please consult your tax advisor for more detailed information regarding the Roth IRA or for advice regarding your individual situation.

Taxes are deferred until withdrawal if the requirements are met. A 10% penalty may be imposed for withdrawal prior to reaching age 59½.

If withdrawals are made within the first two years of participation in the SIMPLE IRA, the penalty increases to 25%.

IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

Brokerage Services are provided by American Century Brokerage, a division of American Century Investment Services, Inc., registered broker/dealer, member FINRASIPC.