Required minimum distributions (RMDs) are the minimum amount the IRS requires you to withdraw annually from tax-sheltered annuities, employer-sponsored retirement plans, and traditional IRAs. Whether it’s an IRA, SEP IRA, or SIMPLE IRA, the IRS mandates that distributions start by age 73. Those still working for their employer beyond the required beginning date for RMD may postpone such distributions until April first of the next year (so long as they don’t hold 5 percent or greater ownership in the employer).

For owners of 401(k) profit-sharing plans and other workplace retirement vehicles, RMDs are only required the year one retires (except for those who own 5 percent or more of the plan-sponsoring company). Roth IRAs, which have tax payments front-loaded, do not carry with them required withdrawals until the owner’s passing. While Roth accounts held within 401(k) or 403(b), plans did have associated RMDs until 2023; this is no longer the case.

Calculating the RMD amount involves dividing the individual account balances by the distribution period. Lifetime required minimum distributions have a uniform distribution period that applies to nearly all taxpayers of a certain age. The one exception is when one’s spouse is a sole beneficiary and their age is a decade or younger.