Taking your required minimum distribution (RMD)
Confused about RMDs? We can help!
Traditional IRAs and employer plans like a 401(k) allow you to put off paying federal taxes, often for decades. Generally, your required minimum distribution (RMD) for a given year must be withdrawn by December 31 of that year, either in a lump sum or in installments. However, if you're taking an RMD for the first time, you may delay withdrawing the RMD until April 1 of the year after the year you turn age 72* (or, in some cases, until after the year you retire).
The CARES Act provides a temporary waiver of RMDs for 2020. If you would have had an RMD obligation for 2020, you do not have to take your RMD for 2020 if you don't want to.
If you have already taken a withdrawal in 2020 that would have represented an RMD, you may be eligible to roll the money over within 60 days, subject to IRS rollover rules (including the 60-day rollover deadline and the IRA one rollover-per-365 day rule). Distributions from inherited IRAs are not eligible to be rolled over.
Note: The IRS has extended the 60-day rollover deadline for some distributions, but not all. IRS guidance provides that if the 60-day deadline to complete a rollover ends on or after April 1, 2020, but before July 15, 2020, the rollover deadline is extended until July 15, 2020. If you take an RMD this year and want to roll all or part of the distribution back to an IRA, this extension may provide additional time to complete the rollover. (Please note that this extension does not apply if your 60-day rollover deadline would have ended prior to April 1, 2020.)
For more information about the rollover extension and waivers of the 60-day rollover requirement, go to irs.gov or consult a tax advisor. It's possible the IRS may issue additional clarification in the future regarding rollovers of amounts that would have been RMDs, but for the waiver.
*The age at which you must begin taking RMDs differs depending when you were born:
- If you were age 70½ before January 1, 2020 (i.e., you were born before July 1, 1949), you were required to begin taking RMDs for each year beginning with the year you turned age 70½.
- If you were not age 70½ before January 1, 2020 (i.e., you were born after June 30, 1949), you must begin taking RMDs for each year beginning with the year you reach age 72. If you feel unsure about how to navigate RMDs, answer some basic questions and we'll walk you through what to do.
If you feel unsure about how to navigate RMDs, answer some basic questions and we'll walk you through what to do.
Make it automatic
Vanguard offers a free RMD service. Tell us when to process the withdrawal and where to take the money from and we'll handle your RMD each year automatically!
Take your RMD now
Ready to take your RMD? Simply log on to request a withdrawal.
If you'll soon need to take an RMD from your IRA or small business retirement account, and you have questions, you've come to the right place!
This video and the resources available on this page, provide answers to the most common RMD questions that we receive at Vanguard.
I'll be specifically talking about traditional IRAs and small-business retirement accounts, such as SEP-IRAs, SIMPLE IRAs, and i401(k) accounts.
If you need information about an employer retirement plan, use the link to RMD rules for employer retirement plans, which you can find under Related Items.
Roth IRAs are exempt from RMDs. For more information about inherited IRAs, select the link to RMD rules for inherited IRAs, in the Related Items.
So, just when are you required to take your RMD?
In most cases, you'll need to take your first RMD by April 1st, of the year following the year you reach age 72.
Once you have your first RMD under your belt, the annual deadline will be the last day of each calendar year.
But remember, if you miss these deadlines, you may have to pay a tax penalty.
If you'd just as soon not have to deal with the logistics of taking an RMD every year, our free RMD service might be exactly what you're looking for.
Once you've signed up for the service, Vanguard will distribute your RMD on time, year after year, according to the instructions you provide when you enroll.
You can read more about the service and enroll, using the Sign up for RMD service link.
All investing is subject to risk, including the possible loss of the money you invest.
You may wish to consult a tax advisor about your situation.