What are required minimum distributions (RMDs)?

RMDs are mandatory annual withdrawals from traditional IRAs and most employer plans starting at age 73 (under current SECURE 2.0 rules). The amount is calculated by dividing your prior year-end account balance by an IRS life expectancy factor. Missing an RMD triggers a 25% excise tax on the amount not withdrawn (reduced to 10% if corrected promptly). Roth IRAs have no RMDs during the original owner's lifetime.