When you turn 73, the IRS requires you to start withdrawing money from your 401(k) each year. These withdrawals are called required minimum distributions (or RMDs), and those who don’t take them face potential financial penalties.

What Age Do You Have to Start RMDs?

Prior to 2019, the age at which 401(k) participants had to start taking RMDs was 70½. Under the SECURE Act that was raised to age 72. But the rules have changed again, and the required age to start RMDs from a 401(k) is now 73 — for those who turn 72 after December 31, 2022.

Why Do Required Minimum Distributions Exist?

So, requiring people to take a minimum withdrawal amount each year is a way to ensure that people eventually pay tax on the money they saved.

How Are RMDs Calculated?

It can get a bit tricky, but 401(k) RMDs are calculated by dividing the account balance in your 401(k) by what is called a 'life expectancy factor,' which is basically a type of actuarial table created by the IRS. You can find these tables in Publication 590-B from the IRS.

Do Roth 401(k)s Have RMDs?

Yes, Roth 401(k) plans do have required minimum distributions, and this is an important distinction between Roth 401(k)s and Roth IRAs. Even though the funds you contribute to a Roth 401(k) are already taxed, you are still required to take RMDs, following the same life expectancy factor charts provided by the IRS for traditional 401(k)s and IRAs.

Can You Delay Taking an RMD From Your 401(k)?

As noted above, there is some flexibility with your first RMD, in that you can delay your first RMD until April 1 of the following year. Just remember that your second RMD would be due by December 31 of that year as well, so you’d be taking two taxable withdrawals in the same year.

Is my 401(k) subject to RMDs?

Yes, with very few exceptions, 401(k)s are subject to RMDs after its owner reaches age 73, as of 2023. What those RMDs are, exactly, varies depending on several factors.

Can you avoid an RMD on your 401(k)?

You can, if you’re willing to convert your traditional 401(k) account to a Roth IRA. Roth IRAs do not require RMDs, but you will owe taxes on the funds you convert.

🎉 Get a 1% match on IRA contributions and 401(k) rollovers. Learn more

“What's the Difference Between Credit and Debit”

1192 Search Results

Required Minimum Distribution (RMD) Rules for 401(k)s

https://www.sofi.com/learn/content/401k-rmd/

…account holder. What’s important to know, as it relates to RMDs from 401(k)s, is that there can be tax consequences if you don’t take them when they’re required — and…

Short Calls vs Long Calls: Complete Comparison

https://www.sofi.com/learn/content/short-call-vs-long-call/

Table of Contents Short Calls vs Long Calls What Are Short Calls? What Are Long Calls? Comparing Short Calls vs Long Calls FAQ What’s the Difference Between Short Calls and…

Getting Financial Aid When Your Parents Make Too Much

https://www.sofi.com/learn/content/financial-aid-for-higher-income-families/

…non-need-based aid includes Direct Unsubsidized Loans, Direct PLUS Loans, and TEACH Grants. One big difference between subsidized and unsubsidized loans is when interest accrual starts. Because subsidized loans are need-based,…

Guide to Zero-Coupon Certificates of Deposit (CDs)

https://www.sofi.com/learn/content/what-is-a-zero-coupon-certificate-of-deposit/

…holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not…

What Are Payable On Death (POD) Accounts?

https://www.sofi.com/learn/content/payable-on-death/

…the account when you pass away. The same is true with regard to life insurance. Differences The main difference between payable on death accounts and other beneficiary accounts lies in…

< Prev 1 … 214 215 216 217 218 … 239 Next >

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or other eligible status, be residing in the U.S., and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates reserved for the most creditworthy borrowers. If approved, your actual rate will be within the range of rates at the time of application and will depend on a variety of factors, including term of loan, evaluation of your creditworthiness, income, and other factors. If SoFi is unable to offer you a loan but matches you for a loan with a participating bank, then your rate may be outside the range of rates listed above. Rates and Terms are subject to change at any time without notice. SoFi Personal Loans can be used for any lawful personal, family, or household purposes and may not be used for post-secondary education expenses. Minimum loan amount is $5,000. The average of SoFi Personal Loans funded in 2023 was around $33K. Information current as of 2/26/24. SoFi Personal Loans originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org). See SoFi.com/legal for state-specific license details. See SoFi.com/eligibility for details and state restrictions.

✝ To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

TLS 1.2 Encrypted

Equal Housing Lender

“What's the Difference Between Credit and Debit”

Required Minimum Distribution (RMD) Rules for 401(k)s

Short Calls vs Long Calls: Complete Comparison

Getting Financial Aid When Your Parents Make Too Much

Guide to Zero-Coupon Certificates of Deposit (CDs)

What Are Payable On Death (POD) Accounts?

Student Loan Refinancing

Personal Loans

Online Investments

Other

Student Loan
Refinancing

Personal
Loans

Online
Investments