Required minimum distributions are the government's way of making sure it eventually collects taxes on retirement money you sheltered for decades.
If you turned 73 this year, or you're older and have a traditional IRA or 401(k), the IRS expects a chunk of that account to come out before December 31.
Miss it, and the penalty is a 25% excise tax on the amount you should have withdrawn—dropping to 10% if you catch and correct the mistake quickly.
The math is simpler than the paperwork feels.
Your RMD is your account balance from the prior December 31 divided by a life expectancy factor the IRS publishes each year.
A 73-year-old with a $500,000 IRA, for example, divides by 26.5 and lands on roughly $18,868 for the year.
That figure is not a suggestion; it's a minimum, and taking more is allowed.
One trap snags first-timers every single year.
You can delay your very first withdrawal until April 1 of the following year, but that means two taxable distributions land in the same calendar year.
For someone on Medicare, that spike in reported income can trigger higher Part B and Part D premiums two years later through the income-related adjustment.
For most people, taking the first one on schedule is the cheaper path.
Accounts with multiple IRAs work differently than most people assume.
You can't just satisfy the total from one account and call it done—the rule requires calculating each IRA separately, though you're allowed to pull the combined amount from any one or several of them.
Workplace 401(k)s play by their own rules and generally must each be satisfied individually.
The most expensive mistake doesn't involve a missed withdrawal at all.
It's forgetting to move money out of a taxable IRA and into a Roth, where no RMD applies to the original owner.
A Roth conversion done before year-end can shrink next year's required amount, but the converted dollars count as income now.
The trade-off only pays off if you're in a lower bracket today than you expect later.
If you inherited an IRA from someone who wasn't your spouse, the rules tightened under the SECURE Act and its follow-up.
Most non-spouse beneficiaries now face a 10-year clock to empty the account, with annual withdrawals required in some of those years depending on the situation.
The details here get genuinely messy, and getting them wrong is expensive.
There's also a quiet change many retirees miss: starting in 2024, the penalty for missed RMDs dropped from 50% to 25%, and it falls to 10% if corrected within a two-year window.
Our take: the RMD is less a retirement tool than a bill arriving on a schedule, and treating it that way makes planning easier.
Final Thoughts
Check your balance, run the division, and calendar the date—before the holidays swallow December.