If you're 73 or older, you are required to start taking withdrawals from your tax-deferred retirement accounts, such as traditional IRAs and 401(k)s. These withdrawals are known as required minimum distributions, or RMDs.
Specifically, if you turn 73 during 2025, you're required to take your first RMD by April 1, 2026. However, subsequent RMDs must be taken by Dec. 31 of each year, so it can be smart not to wait until the last minute. If you take your first RMD in early 2026, you'll be required to take another by the end of that year, and withdrawing this much money can have significant tax implications.
It's generally a smart idea to take your first RMD during the calendar year in which you turn 73.
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How much do you need to withdraw for your 2025 RMD?
Fortunately, the RMD formula is rather simple, and you only need two pieces of information:
- First, you'll need your retirement account balance at the end of the previous year (so, as of Dec. 31, 2024).
- Second, you'll need the appropriate life expectancy factor for your age, which you can find in IRS-published tables. Most people use the Uniform Lifetime Table, unless your spouse is over 10 years younger than you and is the sole beneficiary of your retirement accounts. (You can find them here.)
To calculate your RMD, simply divide the account balance by the life expectancy factor.
Let's see how this works. We'll say that you had a $1 million balance in your 401(k) at the end of 2024, and that you'll turn 77 years old in 2025. This corresponds to a life expectancy factor of 22.9, according to the Uniform Lifetime Table.
Dividing $1 million by 22.9 gives you a 2025 RMD of $43,668. You can take this out as a lump sum, or incrementally throughout the year.
