Required Minimum Distribution
Certified Financial Planner glossary · Certified Financial Planner
Definition
The annual amount a retirement account owner must withdraw once they reach the applicable RMD age under current law.
Required Minimum Distribution in plain English
A client turns the applicable RMD age and asks whether leaving the IRA untouched another year is still fine. A Required Minimum Distribution is the annual amount a retirement account owner must withdraw once they reach the applicable RMD age under current law. Missing it can trigger an excise tax on the shortfall. Use current-law ages from SECURE 2.0-era rules; citing 70.5 or 72 as if they were still universal is Stale Law on many stems. Confirm account type and age before calculating the dollar amount.
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