When you reach age 73, you generally have to start taking required minimum distributions (RMDs) from your IRAs and tax-deferred retirement plan accounts.
RMDs are the minimum amounts that the IRS requires you to withdraw from traditional, SEP/SARSEP or SIMPLE IRA accounts each year once you turn age 73.
You’re also required to take RMDs from employer plan accounts, e.g., 401(k), 403(b), 457, money purchase and profit-sharing plans. Those distributions generally begin when you turn age 73 or when you retire, whichever is later.
The SECURE 2.0 Act increased the age when required minimum distributions (RMDs) must begin from 72 to 73, effective for individuals turning 72 on or after January 1, 2023. If you reached age 72 before this date, you are still required to take RMDs.
The RMD is designed by the IRS to ensure you withdraw a portion of the funds in your account over your lifetime. Federal and state income taxes will be withheld from your distribution when applicable.
Note: If you don't withdraw your RMD each year, you will be subject to a 25% tax penalty on any amount that should have been withdrawn but wasn′t. The tax penalty may be reduced to 10% in certain situations.
Yes. You can delay taking the first distribution until April 1 of the year after you reach 73. If you wait, you’ll have to take two distributions in that same year (the second one no later than December 31). In each subsequent year, you must take your annual RMD by December 31.
If you have a 403(b) account and you’re still working for the employer that sponsors your plan, you can generally wait until the later of retirement or until you’re 73 before you have to start taking distributions (unless you’re a 5% owner of your company). This rule also applies to 401(k), profit-sharing or other defined contribution plans.
The SECURE 2.0 Act increased the age when RMDs must begin from 72 to 73, effective for individuals turning 72 on or after January 1, 2023. If you reached age 72 before this date, you are still required to take RMDs.
We’ll calculate your RMD upon your request using the applicable IRS table and will consider each IRA and/or 403(b) account separately. However, our calculation will consider your American Funds accounts individually and will not consider any other IRA or retirement plan you may have.
When you ask us to determine your RMD amount, we’ll set up the distributions so that they are taken proportionately from each fund in your account(s). You can instruct us to pay your RMD annually or on a more frequent basis. We will recalculate your RMD each year in accordance with IRS guidelines.
To have American Funds calculate your RMD and send it directly and securely to your bank account annually or on a more frequent basis:
1. Complete the Required Minimum Distribution Request (PDF).
2. If a signature guarantee is NOT required, you may upload the form to our website or fax it to (888) 421-4371. Otherwise, mail it to the service center in your region.
Yes. You need your current age, your ending account balance for the previous year and the life expectancy factors found in the IRS Uniform Lifetime Table to calculate your RMD.
Note: The IRS publishes other expectancy tables that may apply to your situation. Visit the IRS website for more information.
Divide your account balance by the applicable IRS life expectancy factor in the table based on your situation.
Hypothetical example: Brian is a retired 401(k) participant who turned 76 on March 31. His daughter, Susan, is the beneficiary on his account. On December 31 of last year, the ending balance in his 401(k) was $262,000. To calculate his RMD for this year, he divides $262,000 by his life expectancy factor of 23.7 years. His distribution amount is $11,054.85.
You may prefer to calculate your own RMD every year if:
No. The life expectancy factor will vary depending on your situation. For example, if your spouse is the only beneficiary on your account and he or she is more than 10 years younger than you, then you can use the joint life expectancy factors in the IRS Joint Life and Last Survivor Expectancy Table to calculate your annual distributions. Visit the IRS website to learn more about the other life expectancy tables.
Hypothetical example: Jessica is a 76-year-old IRA owner. Her husband, Jeff, is the sole beneficiary on her account. Jeff is 60 years old. On December 31 of last year, Jessica’s ending account balance was $262,000. To calculate her RMD for this year, she divides $262,000 by the joint life expectancy factor of 28.2 years. Her distribution amount is $9,290.78.
You may still calculate your RMD using the Joint Life and Last Survivor Expectancy Table for the year in which your marital status changes, either due to divorce or the death of your spouse. The Uniform Lifetime Table must be used in the following years.
You need to calculate RMDs separately for each IRA you own, but you can withdraw the total amount from one or more of the IRAs. The same rules apply to 403(b) accounts.
RMDs from 401(k), 457, money purchase and profit-sharing plan accounts must be taken separately from each plan.
Note: RMDs don’t apply to Roth IRAs in your lifetime. However, to avoid RMDs on Roth contributions you’ve made to your 403(b) plan (Roth contributions are not available in American Funds 403(b) plans), you’ll need to roll over the Roth portion of your 403(b) account into a Roth IRA as soon as you can. Check with your employer or financial professional for rules regarding rollovers.
You can invest RMDs taken from your retirement account in a non-retirement account. The distribution from your IRA or retirement plan account is subject to voluntary income tax withholding because moving money from a retirement account to a non-retirement account is a taxable transaction.
1. Complete the Required Minimum Distribution Request (PDF).
If you currently do not have an American Funds non-retirement account, contact your financial professional to obtain an application.
2. If a signature guarantee is NOT required, you may upload the form (and application, if applicable) to our website or fax it to (888) 421-4371. Otherwise, mail it to the service center in your region.
Yes. However, the RMD request form can only be used for your RMD. An additional distribution amount would need to be requested separately due to the tax calculations.
Yes. Federal income tax withholding applies, and certain states also require income tax withholding.
If you calculate your own RMD each year, you must make a withholding election each time you request a withdrawal. American Funds must withhold 10% federal income tax unless you opt out or ask for a different amount. If you’re taking an RMD from your 403(b) plan account and withdraw more than the RMD, then 20% federal income tax withholding will be applied to the excess amount.
Required Minimum Distributions Brochure (PDF)
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