IRA Withdrawals: Required Minimum Distributions

Once you reach age 72 you are required to take annual Required Minimum Distributions (RMDs) from your retirement accounts.

Need IRA help? Call 866-855-5636

The amount of your RMD is calculated

The amount of your RMD is calculated by dividing the value of your Traditional IRA by a life expectancy factor, as determined by the IRS. You need to calculate your RMD for each IRA separately, but you have the flexibility to take your total RMD amount from either a single IRA or a combination of IRAs. However, RMDs from Qualified Retirement Plans or Inherited IRAs must also be calculated separately, and can only be taken from their respective accounts. You do not need to take RMDs for Roth IRAs. 

Traditional IRA RMD rules

  • Step

    See when to start taking RMDs

    Your first RMD must be taken by 4/1 of the year after you turn 72. Subsequent RMDs must be taken by 12/31 of each year. If you don't take your RMD, you'll have to pay a penalty of 50% of the RMD amount.

     

  • Step

    Calculate your RMD amount

    Use our RMD Calculator to find the amount of your RMD based on your age, account balance, beneficiaries, and other factors. If you have multiple IRAs, you must calculate each account individually, but you can take your total RMD amount from one IRA or a combination of IRAs.

    Questions? Call us at 866-855-5636.

  • Step

    Decide how to receive your RMD

    You can make a one-time (also known as "lump-sum") withdrawal or a series of withdrawals, or schedule automatic withdrawals.

    Whether you want to transfer your RMD funds to another account, take automatic withdrawals, or take your RMD as cash, we can help. If you're a Schwab client, call us at 866-855-5636.

At Schwab, we offer clients several withdrawal options including:

  • Requesting a check online.
  • Writing your own checks via the IRA Check Writing feature (Schwab clients, login to access IRA Check Writing or learn more).
  • Using Schwab MoneyLink
  • Transferring RMD funds in-kind. (i.e. no need to sell) to a non-retirement account (at Schwab or elsewhere).
  • Coming into a Schwab branch directly.
  • Calling us to request a distribution verbally at 866-855-5636.
  • Submitting an IRA Distribution form.

Roth IRA rules

Required minimum distributions are not required for Roth IRAs.

Want to convert your Traditional IRA to a Roth? Learn more about Roth IRA conversions.

Common questions

An RMD is the annual Required Minimum Distribution that you must start taking out of your retirement account after you reach age 72. The amount is determined by the fair market value of your IRAs at the end of the previous year, factored by your age and life expectancy.

Yes, you can always take out more than the RMD amount. However, keep in mind that your withdrawal will be taxed as ordinary income, and any excess that you take out does not count toward your RMD amount for future years. 

If you have a Traditional, Rollover, Inherited, SEP, or SIMPLE IRA, you'll need to take an RMD. RMDs are not required with Roth IRAs, unless you inherit a Roth IRA from a non-spouse.

If you don't take your RMD by the IRS deadline, you may be liable for a 50% penalty on insufficient or late RMD withdrawals. Follow the IRS guidelines and consult your tax advisor. Because there are no RMDs for Roth IRAs, a Roth IRA withdrawal won’t satisfy your RMD requirement.
 

To calculate your RMD, start by listing the fair market value of your IRAs as of December 31 of the previous year. You'll need to calculate your RMD separately for each IRA you own. RMDs aren't required for Roth IRAs, so you don't have to include them in your calculations. We can calculate your IRA RMD for you, or you can use our RMD Calculator.

As a Schwab client, you have several options. You can:

  • Receive your IRA distribution online. Go to schwab.com/movemoney, log in to your IRA, then click on Online Transfers or Check Request and follow the instructions.
  • Set up recurring RMDs through Schwab MoneyLink®. Your annual RMD will be automatically calculated and then transferred to the account you designate. (To enroll, visit Schwab.com or call 800-435-4000.)
  • Transfer investments in kind (e.g., moving stocks, mutual funds, or cash from your IRA into your non-retirement account at Schwab).
  • Write your own checks via the IRA Check Writing feature. Go to schwab.com/irachecks, log in to your account and request your checks. Learn more. 
  • Request a check. Call us at 800-435-4000 and we’ll send you a Schwab RMD Request Form.

The total amount of your RMD is taxed as ordinary income at your personal federal income tax rate. State taxes may also apply. If you've made a nondeductible IRA contribution, it will not be taxed. However, your earnings will be taxed provided you filed an IRS Form 8606. Learn more about IRS Form 8606 at www.irs.gov or by calling 800-829-3676.

There are many options for your RMD if you want the money to keep working for you, but you are still required to take your RMD. After taking the RMD you can invest it into a Schwab One® brokerage account, contribute to a 529 saving plan for a relative to attend college, or even make a current year contribution back to either a Traditional or Roth IRA (if you have earned income for that contribution year). Call us at 800-435-4000 if you need assistance.

Take the next step

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    Questions about IRA withdrawals or RMDs? Call 866-855-5636.


Tax information disclosure

This tax information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends that you consult with a qualified tax advisor, CPA, financial planner, or investment manager. Depending on the type of account you have, there are different rules for withdrawals, penalties, and distributions.  Please understand these before opening your account.

Please read the Schwab Intelligent Portfolios Solutions™ disclosure brochures for important information, pricing, and disclosures related to the Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium programs.  
 
Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™ are made available through Charles Schwab & Co. Inc. ("Schwab"), a dually registered investment advisor and broker dealer. Portfolio management services are provided by Charles Schwab Investment Advisory, Inc. ("CSIA"). Schwab and CSIA are subsidiaries of The Charles Schwab Corporation.

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