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Required Minimum Distribution (RMD)

A required minimum distribution is the amount the IRS forces you to withdraw each year from tax-deferred retirement accounts — traditional IRAs and 401(k)s — starting at age 73. Because that money was never taxed, the government eventually makes you take it out and pay income tax on it.

The amount is your account balance divided by an IRS life-expectancy factor, so it grows as a percentage over time. Roth IRAs have no lifetime RMDs, a key advantage — which is why some retirees convert traditional balances to Roth before 73 to shrink future forced withdrawals.