Required Minimum Distribution (RMD) Rules for Account Types

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Published: March 10, 2025

Understanding RMD for account types is essential, as distribution requirements vary across different accounts. Knowing these distinctions ensures you withdraw the correct amount and avoid penalties.

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This blog is part of a series that provides a comprehensive overview of RMDs. For a complete guide covering rules, strategies, and deadlines, check out How to Follow RMD Rules and Make Withdrawals Easy.

Traditional IRAs and 401(k)s

Traditional IRAs and 401(k)s are tax-deferred retirement savings accounts, meaning you contribute pre-tax dollars, and your money grows tax-free until withdrawal. However, the IRS requires RMDs starting at age 73 (or 75 if you were born in 1960 or later).

Key RMD Rules for Traditional IRAs and 401(k)s

RMDs must be calculated separately for each account.
For IRAs, you can withdraw your total RMD from one or multiple IRAs.
For 401(k)s and other employer-sponsored plans, you must take RMDs separately from each plan.
If you still work past age 73, you may be able to delay RMDs from your current employer’s 401(k) using the Still Working Exception (but only if you do not own 5% or more of the company). For more details, see The “Still Working” RMD Exception Refresher by Greenleaf Trust ↗.

Roth Accounts (Roth IRAs & Roth 401(k)s)

Roth accounts offer tax-free withdrawals in retirement, but their RMD rules differ.

Roth IRAs

No RMDs during the account holder’s lifetime.
Allows tax-free growth for as long as you live.
If passed to a non-spouse beneficiary, RMDs apply under the 10-year rule for most heirs.

Roth 401(k)s

Before 2024—Roth 401(k)s required RMDs starting at age 73.
Starting in 2024—The SECURE Act 2.0 eliminated Roth 401(k) RMDs, aligning them with Roth IRAs.
Even though Roth 401(k)s no longer require RMDs, rolling them into a Roth IRA may still provide better investment flexibility and estate planning benefits.

403(b) and Profit-Sharing Plans

403(b) Plans

Used primarily by public schools and non-profits.
Follow the same RMD rules as 401(k)s.
If you have multiple 403(b) accounts, you can aggregate RMDs and withdraw from just one.
However, 403(b) RMDs cannot be combined with IRA or 401(k) RMDs.

Profit-Sharing Plans

Allow employers to contribute to employee retirement accounts based on company profits.
RMDs apply starting at age 73.
Must be taken separately from other retirement accounts like IRAs or 401(k)s.

Understanding Your RMD Obligations

Each retirement account type has unique RMD rules. Failing to take the correct RMDs on time can result in a penalty of 25% (or 10% if corrected within the IRS grace period). Knowing which accounts require withdrawals and how aggregation works can help you plan your distributions effectively.

Next: When to Take Your Required Minimum Distribution (RMD)

Now that you understand how to calculate your RMD, the next step is knowing when to take it—and what happens if you miss the deadline. Timing your withdrawals correctly can help you avoid IRS penalties and manage your taxable income more effectively.

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