Learn about Required Minimum Distributions (RMDs)
What are Required Minimum Distributions?
Federal tax rules require you to start taking withdrawals from your tax-deferred retirement plans, known as required minimum distributions (RMDs). Since retirement savings are typically pre-tax, this ensures you pay the requisite taxes as you use the funds in retirement.
RMDs apply to:
- traditional IRAs, SEP IRAs, SIMPLE IRAs, and
- retirement plans like 401(k)s, 403(b)s and 457(b)s.
Roth IRAs do not have RMDs during the account owner's lifetime.
If you don't start your RMDs at the right time, it can result in up to a 50% excise tax* on the amount you should have withdrawn.
*25% in tax years after 12/29/2022.
However, the SECURE 2.0 Act reduces the excise tax rate to as low as 10%—if the required distributions and taxes are corrected within two years.
When do you need to start taking RMDs?
Your first RMD must be taken by April 1st following the year you reach your RMD Age*.
For example, if you turn 73 on October 4, 2024, you’ll need to take your first RMD by April 1, 2025.
Your remaining RMDs must be taken by December 31st each year.
Which means, if you turn 73 on October 4, 2024, you’d need to take another RMD by December 31, 2025, and each year after.
* ”RMD Age” is age 70½ if you were born before 7/1/1949; age 72 if you were born on or after 7/1/1949 or in 1950; age 73 if you were born between 1951 and 1959; and age 75 if you were born on or after 1960
How to receive your RMDs with TIAA
TIAA can help you meet federal RMD requirements by automatically calculating and disbursing the required amount each year from your tax-deferred accounts. You can set these up through your online account or call us at
Flexibility and convenience with your RMDs
With TIAA, you can decide how often to receive your withdrawals—monthly, quarterly, semiannually, or annually—and choose the specific day of the month, from the 1st to the 28th. You can also change these settings at any time during the year, offering you control and convenience.
How RMDs are calculated
RMDs are calculated based on your account balance and a life expectancy divisor, which estimates how long a person of your age is expected to live.
If your spouse is your sole primary beneficiary and is more than 10 years younger than you, a joint life expectancy calculation may be used, potentially lowering your RMD amount.
Calculate and track RMDs for all your tax-deferred retirement accounts.
Special rules for 403(b) plans
For people participating in 403(b) retirement plans, any contributions and earnings credited before 1987 are considered "grandfathered." These amounts are not subject to RMD rules until you reach age 75.
Once you turn 75, these grandfathered amounts will be included in your RMD calculation, which may increase your required withdrawal amount.
It's important to note that the grandfathering rules for 403(b) plans do not apply to IRAs or other types of retirement plans.
How RMDs are taxed
RMDs are generally taxed as ordinary income in the year they are received. However, if you made after-tax contributions to your accounts, a portion of each RMD may be tax-free.
TIAA will send you a report each January detailing the total income you received the previous year, along with a breakdown of the taxable and non-taxable portions.
Depending on your state of residence, you may have some flexibility in choosing the amount of federal and state tax to be withheld from your RMDs. It’s advisable to consult with a tax advisor to ensure you’re meeting all state and federal tax obligations.
For federal estate tax purposes, the value of your retirement savings that passes to your heirs is generally included in your estate. If your estate is valued at $13.61 million or less (for the 2024 tax year), it won't be subject to federal estate taxes. However, estate and income taxes can significantly reduce the value of retirement assets in a large estate.
Tax tips for RMDs
- If you roll over your 403(b) account with grandfathered amounts to another qualified retirement plan or IRA, the grandfathered status is lost, and regular RMD rules apply.
- Delaying your first RMD could result in higher taxes based on the need to take a second RMD within the same year.
Exceptions to RMD rules
Your RMD age depends on your birth date. If you work past your RMD age, you can delay withdrawing funds from your employer's retirement plan until April 1 after the year you retire, provided your retirement savings are consolidated into your current employer's plan before reaching your RMD age.
Here are other exceptions:
- RMDs must begin from your IRAs (except Roth IRAs) by April 1 after you reach your RMD age, regardless of your employment status.
- While Roth IRAs do not have RMDs for the original owner, they do apply to beneficiaries.
- Retirement plans under the Internal Revenue Code for Puerto Rico aren't subject to U.S. RMD rules, though an employer may choose to apply them.
This material is for informational or educational purposes only and is not fiduciary investment advice, or a securities, investment strategy, or insurance product recommendation. This material does not consider an individual’s own objectives or circumstances which should be the basis of any investment decision.
Investment products may be subject to market and other risk factors. See the applicable product literature or visit TIAA.org for details.
Retirement check refers to the annuity income received in retirement. Guarantees of fixed monthly payments are only associated with TIAA's fixed annuities.
Investment decisions should be made based on the investor's own objectives and circumstances. Advice is obtained using an advice methodology from an independent third-party.
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