Retirement accounts like the 401(k), 403(b), and traditional IRA are tax-deferred, meaning you get a tax break upfront (the ability to deduct contributions from your taxable income), but you must eventually pay taxes on your withdrawals.

To avoid situations where someone skips making withdrawals entirely to avoid the tax obligation, the IRS imposes required minimum distributions (RMDs) that kick in when you turn 73. Knowing the process behind RMDs is necessary to avoid costly penalties.

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Your RMD is based on two key factors: the total value of your retirement account(s) at the end of the previous year and the age you'll turn in the current year. For example, if you're currently 75 but turn 76 this year, 76 would be the age used. Once you have those two pieces of information, figuring out your RMD is a straightforward two-step process:

  1. Look at the provided IRS life expectancy table for your life expectancy factor (LEF). The Uniform Lifetime Table is what applies to most retirees. If your spouse is your sole beneficiary and they're more than 10 years younger than you, you'll use the Joint Life Expectancy Table.
  2. Divide your account balance(s) at the end of the previous year by your LEF.

Assuming you had $500,000 in your account(s) at the end of 2024, below is what your RMDs would be for ages 73 to 80 (the official chart goes to age 120+):

Age Life Expectancy Factor Required Minimum Distribution
73 26.5 $18,868
74 25.5 $19,608
75 24.6 $20,325
76 23.7 $21,097
77 22.9 $21,834
78 22.0 $22,727
79 21.1 $23,697
80 20.2 $24,752

Calculations by author. RMDs rounded to the nearest dollar.

Failing to take your RMD could result in a penalty equal to 25% of the amount you were supposed to withdraw. However, if you correct the mistake and you take your RMD within two years of the missed deadline, you can reduce the penalty to 10%.