Which Retirement Accounts Have RMDs?

There is some confusion around the question of which retirement accounts have RMDs so let’s see if we can clarify. First, “RMD” stands for Required Minimum Distribution. This is the minimum amount that must be taken out of certain accounts starting with the year the account owner reaches age 72.  The RMD is figured based on an IRS table. There are two tables:

  • One if your spouse is the sole beneficiary of your IRA and is more than 10 years younger than you.
  • The second table is for everyone else.

You can find an IRS RMD worksheets at this LINK.

RMDs are required from these types of accounts while the account owner is alive:

Traditional and rollover IRAs

SEPs*

SARSEPs*

SIMPLE IRAs*

Profit-Sharing plans*

401(k) plans*

403(b) plans*

457(b) plans*

*Please note rules for RMDs are slightly different if you are still actively working and have assets in any of these accounts as part of your current employer’s retirement plan.

RMD distributions for beneficiaries are different so don’t get confused by the different rules for beneficiaries. Also note that Roth IRAs don’t have RMDs while the account owner is alive. There are RMDs applied to Roth 401(k) and Roth IRA accounts for beneficiaries.

The penalties for missing an RMD are steep; be sure you understand the rules. The IRS website is an excellent source for information. You can find Frequently Asked Questions at this LINK.

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