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At what age do RMDs stop?

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Required minimum distributions (RMDs) are the amounts you have to withdraw from certain retirement accounts each year. They apply to employer-sponsored retirement accounts as well as individual retirement accounts (IRAs).

RMDs start at a specific age, determined by your birthdate, but you might wonder at what age RMDs stop. Simply put: They don't. They continue indefinitely. You have to keep making withdrawals even if you don't need the cash.

You can use your RMD in a variety of ways. In addition to using the extra income for special purchases or to care for your loved ones, these distributions can become part of your charitable giving strategy.

Here's a look at some of the most common questions about RMDs so you can make the best choices about your retirement portfolio. (Keep in mind that these pertain to accounts that have always belonged to you, not inherited accounts.)

Why are RMDs required?

RMDs start the tax payment process on traditional retirement accounts where taxes were not paid on the money as it was deposited into the account. The Internal Revenue Service (IRS) relies on people eventually paying taxes on these accounts, and RMDs boost your taxable income.

Note: If you contributed to Roth retirement accounts, you already paid taxes when you deposited the money. That's why Roth accounts don't have RMDs.

At what age do RMDs start?

You must begin drawing RMDs at your RMD age, dependent on your birthdate:

  • If you turn 73 before 2033, your RMD age will be 73.
  • If you turn 74 after 2032, your RMD age will be 75.

You can withdraw money before then—and you'll still pay taxes on it—but before your RMD age, it's your choice whether to take money out or not.

At your RMD age, you'll be required to withdraw a minimum amount and pay tax on your withdrawals every year going forward. If you choose to withdraw more than the minimum RMD amount, you'll owe income tax on that money as well.

Do RMDs ever stop?

RMDs don't stop once they begin. You'll be able to calculate your minimum distribution at the beginning of each calendar year, and you'll have to take it by the end of that year.

How do I calculate my RMD amount?

The simplest way to calculate your RMD is to use the worksheet provided by the IRS. The formula starts with the balance of your retirement account at the end of the previous year. Then, use one of three tables provided by the IRS:

Using your information and the table, look for the life expectancy factor associated with your age. For example, per the most recent table, a 75 year old has a life expectancy factor of 24.6.

To determine the RMD, divide your account balance by the life expectancy factor. Using the example above, if that 75-year-old had $200,000 in a traditional IRA at the end of the previous year, that balance divided by 24.6 would put that person's RMD at $8,130.08.

When do I need to pay taxes on my RMD?

If you just reached your RMD age, you have until April 1 of the next calendar year to take your first distribution. But you'd also need to take a second distribution by December 31 of that same year. After that, you'll continue having to take the required amount by December 31. Your RMD will count as income that you'll need to to pay taxes on via your annual income tax return, which for most people is due in April of the following year.

What happens if I forget to take my RMD?

The IRS has a penalty if you forget to take your RMD or if you take less than the correct amount. The Secure Act 2.0 reduced the RMD penalty from 50% of the RMD amount missed to 25%. So if you were required to take $8,000 and only withdrew $4,000, you'd owe $1,000 to the IRS.

However, if you make a mistake but correct it within the correction window, the penalty shrinks to just 10%. The correction window begins on the date the tax is imposed and ends at the earliest of: when the Notice of Deficiency is mailed to the taxpayer, when the tax is assessed by the IRS, or the last day of the second tax year after the tax is imposed.

It can be valuable to work with a financial advisor if you think you might forget or miscalculate your RMDs. These professionals can work with you on a personalized retirement withdrawal strategy.

How does it work when I have multiple accounts with RMDs?

You have to calculate the yearly RMD for each traditional retirement account. However, the IRS does offer one simplification option for those with a mix of Traditional IRAs and 403(b) accounts: You can calculate your RMD for all IRAs and withdraw the total required from your IRAs from one individual account. The same goes for 403(b) accounts, you can calculate them together and take the withdrawal from one 403(b) account.

All other account types, however, have to satisfy its own RMD. If you are eligible for this option, you can talk with your financial advisor to determine which withdrawal method is most beneficial to you.

Take charge of your RMDs & more with a financial advisor

A financial advisor spends time learning the regulations for RMDs and stays updated when the IRS guidelines change. As a result, they can bring a valuable perspective as you begin planning your income and spending strategy in retirement.

Connect with a local Thrivent financial advisor for all retirement planning needs, including navigating the rules and regulations around required minimum distributions. These trusted professionals act with your best interests in mind and can advise you on how to use your retirement savings to achieve your goals of living generously and connecting with others.

Thrivent and its financial advisors and professionals do not provide legal, accounting or tax advice. Consult your attorney or tax professional.