Required minimum distributions (RMDs) explained: ages, amounts, and how to plan for them
A traditional IRA or 401(k) lets you defer tax, not avoid it. At some point the IRS requires you to start taking money out whether you need it or not. Those forced withdrawals are required minimum distributions (RMDs), and they show up in Runway's Withdrawal Plan as soon as they apply to you. Here's when they start, how the amount is set, and what you can do about the tax bill they create.
Which accounts have RMDs?
Traditional IRAs, SEP and SIMPLE IRAs, and employer plans like 401(k)s. Roth IRAs and designated Roth accounts are different: the IRS says withdrawals from them are "not required until after the death of the account owner." That one rule is the reason Roth conversions are the main RMD-planning tool (more below). Taxable brokerage accounts and cash have no RMDs either.
At what age do RMDs start?
The starting age depends on when you were born. The IRS states that you "must start taking withdrawals ... when you reach age 73," and the final SECURE 2.0 regulations set the applicable age at 73 for people born from 1951 through 1959 and at 75 for people born on or after January 1, 1960 (Internal Revenue Bulletin 2024-33: "for employees born on or after January 1, 1960, the applicable age is 75"). If you're in your early 60s today, plan on 75; if you're older, it's 73.
How is the amount calculated?
The IRS describes it as dividing "the prior December 31 balance" of each account by a life-expectancy factor. For most people that factor comes from the Uniform Lifetime Table in 26 CFR §1.401(a)(9)-9 (reproduced in IRS Publication 590-B). The factor shrinks every year you age, so the percentage of your balance you must withdraw rises. On a $1,000,000 balance:
| Age | IRS factor | Share of balance | RMD on $1,000,000 |
|---|---|---|---|
| 73 | 26.5 | 3.77% | $37,736 |
| 75 | 24.6 | 4.07% | $40,650 |
| 80 | 20.2 | 4.95% | $49,505 |
| 85 | 16.0 | 6.25% | $62,500 |
| 90 | 12.2 | 8.20% | $81,967 |
| 95 | 8.9 | 11.24% | $112,360 |
(The table holds the balance fixed to isolate the factor. In real life the balance changes every year with growth and withdrawals, and each spouse's accounts are calculated separately. Different tables apply if your sole beneficiary spouse is more than ten years younger, or for inherited accounts.)
What happens if I miss one?
The IRS says the amount not withdrawn "may be subject to an excise tax of 25%" — reduced to 10% if you correct it within two years. That makes a missed RMD one of the more expensive mistakes in retirement, and a reason to automate the withdrawal.
Why do RMDs matter so much for planning?
RMDs are ordinary income, and they arrive at the same time as everything else: Social Security, pensions, and the Medicare premiums that rise with income. A large, rising RMD can push you into a higher tax bracket, make more of your Social Security taxable, and cross one of the IRMAA lines for Medicare. The size of the problem is set decades earlier, by how much sits in pre-tax accounts when RMDs begin.
Can I reduce my RMDs? What converting to Roth does
The main lever is moving money out of pre-tax accounts before RMDs start, by converting some of it to Roth and paying the tax now at a bracket you choose. Here is Runway's engine on its sample couple (Pat 65 and Alex 64, $950,000 in traditional IRAs, $95,000 of yearly spending, Social Security claimed at 69 and 68), comparing no conversions with converting each year up to the top of a chosen bracket:
| Strategy | Converted in total | Lifetime federal tax | Traditional balance at 95 | Total balance at 95 |
|---|---|---|---|---|
| No conversions | $0 | $282,822 | $1,159,786 | $1,829,763 |
| Fill the 12% bracket | $302,400 | $156,926 | $644,812 | $2,910,816 |
| Fill the 22% bracket | $634,200 | $115,155 | $0 | $2,819,196 |
Converting costs tax now but leaves less in the account that RMDs would have drained at higher rates later; in this example it cuts lifetime tax by $125,896 for the 12% strategy and lifts the total left at 95 from $1.83 million to $2.91 million. That is one household with one set of assumptions — the answer changes with income, brackets and how long you live — which is why the real decision needs your numbers. The Roth conversion guide and the free calculator explain the break-even logic, and Roth vs. traditional covers the basics.
How does Runway handle RMDs?
The Withdrawal Plan page lists the required distribution as a line item the year it applies, and the Today's Actions list on the Overview flags it. One limitation to know about: Runway currently starts RMDs at 73 for everyone. If you were born in 1960 or later, your real starting age is 75, so Runway's RMDs arrive two years early — a conservative simplification for the tax bill, but not exact.
See when RMDs hit your plan. Enter your accounts and ages and Runway shows the required distribution in your withdrawal plan — free to start.
Try the plannerHow were these numbers computed?
RMD amounts are the account balance divided by the Uniform Lifetime Table factor from 26 CFR §1.401(a)(9)-9; the factors in the table above match that regulation. The conversion comparison is Runway's multi-year engine on the sample household with default market assumptions, married filing jointly, plan through age 95; lifetime federal tax is the sum over every year; balances are in today's dollars. Runway starts RMDs at 73 for every household.