IRA Required Minimum Distributions 2025
Wednesday, February 19, 2025
Required minimum distributions (RMDs)
If you're age 73 or older, you generally must take RMDs from your tax-deferred IRAs before December 31 each year. The one exception is the year you turn 73, when you may wait until April 1 of the following year to take your initial distribution. Delaying, however, means you'll have to take two RMDs that year, which could bump you into a higher tax bracket.
For Roth IRAs, original owners are exempt from RMD rules, but
beneficiaries who inherit a Roth are generally required to take distributions (see "Designating a beneficiary for your IRA").
The IRS requires that you calculate the RMD for each tax-deferred IRA separately, based on the value of the account at the end of the prior year divided by your life expectancy factor, which you can find in IRS Publication 590-B. You can then aggregate the RMDs for each IRA account and take your distribution from one or multiple IRAs in any combination, as long as you withdraw the total amount required. If you fail to take your total RMD by the due date, you'll owe a penalty of up to 25% of the amount not taken (plus ordinary income tax, of course).
Take note that RMDs count toward your income, so your distributions could increase your taxes. If you expect to be in a higher tax bracket in retirement, it's worth looking at ways to help reduce your RMD taxes, such as a Roth conversion (see "Converting a traditional IRA to a Roth") or a qualified charitable distribution (QCD).
Hayden Adams, Charles Schwab
2/19/2025
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