Glossary

Required minimum distribution (RMD)

The minimum amount the IRS requires you to withdraw each year from traditional IRAs and most workplace retirement plans once you reach a set age.

Also called: RMD, required minimum distributions, minimum required distribution

A required minimum distribution is the yearly withdrawal the tax code forces from tax-deferred retirement accounts, including traditional, SEP and SIMPLE IRAs, 401(k) and 403(b) plans, and annuities held inside them. Roth IRAs don't require withdrawals during the owner's lifetime.

Under the SECURE 2.0 Act, RMDs start at age 73 for people born from 1951 through 1959 and at 75 for those born in 1960 or later, according to IRS guidance as of 2026. The first RMD can wait until April 1 of the following year; after that, each is due by December 31. The amount is generally the prior December 31 balance divided by a life expectancy factor from IRS tables. Hypothetically, a $300,000 IRA divided by a factor of 26.5 requires a withdrawal of about $11,321. Missing an RMD triggers a 25 percent excise tax on the shortfall, cut to 10 percent if corrected within two years.

RMDs matter for annuities because a qualified annuity inside an IRA must satisfy them. Lifetime annuity payments from the contract generally count, and a qualified longevity annuity contract lets you defer RMDs on a limited amount. See Should you put an annuity in an IRA? and qualified longevity annuity contracts.

Last reviewed October 4, 2026

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Related terms

Qualified annuity An annuity bought with pre-tax retirement money, such as inside an IRA or 401(k), so withdrawals are taxed as income and minimum distribution rules apply. Annuity A contract with a life insurer that grows savings tax-deferred, turns them into guaranteed income, or both, in exchange for one or more payments. Annuitization Converting an annuity's account value into a stream of guaranteed payments for life or a set period, usually giving up access to the lump sum. Non-qualified annuity An annuity bought with after-tax money outside an IRA or employer plan; earnings grow tax-deferred, and only the gains are taxed when withdrawn. Deferred annuity An annuity that grows tax-deferred for years before income begins, used to build retirement savings or lock in future lifetime payments.

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