How Much Is the Required Minimum Distribution (RMD) If You Have $500,000 in Your Retirement Account?
Key Points
If you're 73 years old or older as of this year, you are required to annually withdraw money from most retirement savings accounts.
The size of this withdrawal varies with age and the amount of retirement savings subject to RMDs.
Be sure to pay attention to all of the rules regarding required distributions, since getting things wrong can lead to penalties or unnecessary costs.
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It's not too late to take required minimum distributions -- or RMDs -- from retirement accounts for tax year 2025. But the clock is most definitely ticking. While retirees turning 73 this year have until April 1 of next year to take their very first RMD, those turning 74 or older this year only have until the end of this month to complete these taxable transactions.
But how much do you need to remove from your IRA to satisfy the IRS' requirement? Your broker or IRA's custodian should have supplied you with all the necessary information, although you'll want to use the IRS' RMD calculation worksheet to come up with the right figure for your age; the older you are, the bigger it is.
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Here's the required minimum distribution on $500,000 worth of retirement savings that's subject to RMD rules.
- Age 73: $18,867.92
- Age 75: $20,325.20
- Age 80: $24,752.48
- Age 85: $31,250.00
- Age 90: $40,983.61
Just remember that not all retirement accounts require distributions. Roth IRAs, for instance, are exempt from RMD rules. And, if you're still working at this age, you're also not required to take minimum distributions from your workplace's 401(k) plan (unless you own more than 5% of the company you work for).
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There are also options for combining the values of multiple retirement accounts to determine your RMD. For example, you can combine the value of all your ordinary/traditional IRA accounts but then take your total distribution from just one. Ditto for 403(b) accounts (although for RMD purposes you can't combine these two different account types).
This flexibility doesn't apply to 401(k) accounts, however, if you happen to own more than one from a former employer; you must calculate and take an RMD for each one of these accounts.
Finally, bear in mind that while there's a required minimum, this doesn't mean you can't take out more than the minimum. You just won't want to do so if at all possible, since doing so raises your tax liability.
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