What is Required Minimum Distribution (RMD)?
Definition A required minimum distribution is the minimum amount you must withdraw each year from most tax-deferred retirement accounts once you reach the age set by law. The amount is based on the account balance and life expectancy, and the withdrawal is generally taxable. Missing an RMD triggers a penalty, though it is lower than in prior years.
Planning the timing and size of RMDs, sometimes with earlier Roth conversions, helps retirees manage their tax bracket and avoid steep penalties.