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Glossary Finance

Required minimum distribution (RMD)

A required minimum distribution is the minimum yearly amount that must be withdrawn from most tax-deferred retirement accounts once the owner reaches a set age.

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In more detail

The amount is the account balance divided by a life-expectancy divisor from an official table. A $500,000 balance with a divisor of 26.5 requires $18,867.92. The starting age and tables are set by law and change, so check current rules.

Try these tools

RMD Calculator

Calculate your Required Minimum Distribution (RMD) using the IRS Uniform Lifetime Table, based on your account balance and current age.

See also

  • Glossary IRA
    An IRA (individual retirement account) is a US personal retirement account with tax advantages that you open yourself.
  • Glossary 401(k)
    A 401(k) is a US employer-sponsored retirement account to which you contribute from your paycheck, often with an employer match.
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