Here's Exactly How to Calculate Your 2025 Required Minimum Distributions (RMDs)

With the holiday season just weeks away, you probably want to focus your attention on parties, gifts, and maybe some upcoming vacations. But if you're 73 or older and you haven't yet taken your required minimum distributions (RMDs) for 2025, that needs to be on your radar as well.

The IRS will charge you a 25% penalty if you fail to take your RMDs on time. Unless you just turned 73 this year, you only have until Dec. 31, 2025, to do this, so don't put it off too much longer.

If confusion about how to determine your RMD is holding you back, that shouldn't be a barrier much longer. Here's a quick breakdown of how to calculate what your RMD should be.

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Do you need to take an RMD at all?

You don't have to take RMDs from Roth accounts, no matter your age. You already paid income taxes on these funds in the year you made them, so the government has no incentive to force you to take the money out now.

You also don't have to take an RMD from your workplace retirement plan if you're still employed and own less than 5% of the company. However, if you have IRAs or retirement plans from past employers, you still have to take RMDs from those. You may be able to avoid the latter if you roll over your old workplace plans into your current plan.

If you just turned 73 in 2025, you technically have until April 1, 2026, to take your 2025 RMD. But if you wait until next year, you'll have to take two RMDs in 2026.

How do you calculate your RMDs?

Calculating your RMD only requires two numbers. You'll need your retirement account balance as of Dec. 31, 2024. Check with your plan administrator if you're not sure what this was. You'll also need the distribution period for your age at the end of 2025 from the IRS's Uniform Lifetime Table.

Once you have what you need, divide your account balance from Dec. 31, 2024, by the distribution period for your age. That's your RMD from that account.

For example, say you're 75 years old and you had $200,000 in your IRA at the end of last year. You'd divide $200,000 by the 24.6 distribution period for 75-year-olds to get about $8,130.

Check how much you've already withdrawn from that account this year. If you haven't yet met your RMD amount, withdraw a little more. Continuing the previous example, if you'd only withdrawn $7,130 so far in 2025, you'd need to take out an additional $1,000 before the end of the year. Repeat this process from all the accounts you have to take RMDs from.

Is there a difference between 401(k) and IRA RMDs?

The IRS requires you to take RMDs from each traditional 401(k) you have following the steps above. But the rules for IRAs are a bit trickier. You calculate your IRA RMDs individually using the process outlined in the last section, but you don't have to take withdrawals from each IRA if you don't want to.

Say you had three IRAs, one with a $500 RMD, one with a $2,500 RMD, and one with a $5,000 RMD. You could take $500 from the first account, $2,500 from the second, and $5,000 from the third. Or you could take all $8,000 from any one of the three accounts. Or any other combination you like as long as you withdraw at least $8,000 from your IRAs.

If you've already taken your RMD during 2025, you're in the clear until next year. If not, don't wait until the last minute. Do it before the holidays are in full swing so you don't have to worry about forgetting.

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