Required minimum distributions (RMDs)

FAQs

• How do I avoid penalties?

  It’s important to withdraw your RMD by the appropriate deadline because the IRS penalty for missed RMD amounts is 25% for calendar years 2023 and beyond, and 50% for calendar years 2022 and earlier.

  For example, say you’re 74 years old and your RMD for calendar year 2023 was $10,000, but you only withdrew $5,000 by December 31. The 25% penalty would apply to the remaining $5,000 you did not take on time. This means that you may owe the IRS $1,250 for not taking your RMD by the deadline.

  If you miss an RMD, you can ask the IRS for a waiver of the penalty. You can find information the penalty and how to request a waiver in the instructions for IRS Form 5329. A tax advisor can also help you through the waiver process.

• How will RMDs impact my taxes?

  The IRS taxes RMDs as ordinary income. This means that withdrawals will count towards your total taxable income for the year. Keep in mind that this income increase may push you into a higher tax bracket and may impact the taxes you pay for your Social Security or Medicare.

  If you’d like to reduce the effect of RMDs on your taxes, consider making a qualified charitable distribution (QCD). A QCD excludes the amount you donate from taxable income and can be counted toward satisfying your RMD for the year, as long as certain rules are met.

• Do I have to take my RMD if I'm still working?

  Yes, even if you continue working past age 73, you have to take an RMD from your IRA.

  However, if you are still working, and you do NOT own more than 5% of the business you work for, you may qualify for an exception from taking RMDs from your current employer-sponsored retirement account, such as a 401(k), 403(b), or small business account until you retire.

• Can I reinvest my RMD?

  Yes, you can reinvest the RMD money you take from your Fidelity retirement accounts. Your reinvestment could be made in a taxable non-retirement account, like a Fidelity brokerage account.

• Can I convert my RMD to my Roth IRA?

  The IRS does not allow you to convert your RMD to a Roth IRA. However, after you have withdrawn your RMD for the year from your IRA, you can convert all or part of the remaining balance to a Roth IRA at any time. Our  Roth Conversion Calculator can help you decide if a Roth conversion is right for you. Remember a Roth conversion is a taxable event. We encourage you to speak to a tax advisor about how a conversion could impact the taxes you owe.

• Can I withdraw my total RMD from one of my retirement accounts?

  If you have multiple IRAs, you have the option to take all your RMDs from a single IRA. You may also choose to withdraw RMDs from multiple 403(b) accounts from a single 403(b). If you have multiple 401(k) accounts, you must withdraw your RMD separately for each 401(k).

  • For traditional IRAs, rollover IRAs, SEP IRAs, SARSEP IRAs, and SIMPLE IRAs: you must calculate the RMD for each of these accounts separately, but you can withdraw the total RMD amount from one or any combination of these IRA types.
  • The same RMD withdrawal methodology can be applied to 403(b)s. 403(b) RMDs cannot be aggregated with non-403(b) RMDs.
  • For 401(k) and or Fidelity Retirement Plan accounts: RMDs must be calculated separately for each account and the calculated amount must be taken from its respective account.
• How do I take my RMD?

  Withdrawing online is the easiest ways to take your RMD. To make a one-time withdrawalLog In Required from your IRA, you'll follow these steps:

  • Enter your withdrawal amount and select an account
  • Set up a withdrawal date and where your withdrawals are sent
  • Choose your tax withholding amounts
  • If necessary, sell your investments to make cash available

  You can also set up automatic withdrawalsLog In Required for your RMD on a monthly, quarterly, annual or custom schedule.

  If you know your RMD amount and you're ready to withdraw now, take your RMDLog In Required.

  If you're ready to withdraw but you don't know your RMD amount, log in to see your estimated RMD amountLog In Required.

  If your 401(k) or 403(b) is with Fidelity, you can find information on how to withdraw your RMD by logging into NetBenefits.

• Do I have to use my RMD money for a specific purpose?

  No, you have no requirements on how you use the RMD money you take from your Fidelity retirement accounts.

  Here are 3 ideas to consider before making your RMD and when planning how to use your RMD money (including immediate transfers to eligible Fidelity accounts):

  • Donate it to a charity with a qualified charitable distribution (QCD) (Note: the QCD must go directly from the retirement account to the charity).
  • Invest it by either doing it yourself in a brokerage account or getting Fidelity's investment help with a Fidelity managed account.
  • Save it or spend it on your current living expenses using a Fidelity cash management account.

  Already have a Fidelity brokerage or cash management account? Taking your RMD can be fast and simple by making an immediate online transferLog In Required.

• Do I have to take my RMDs from my Roth IRA?

  You don’t have to take RMDs from a Roth IRA if you’re the original account owner. However if you have inherited a Roth IRA, you are subject to RMD Rules.

  Withdrawing from a Roth IRA will not count toward meeting the RMD for IRAs or retirement accounts that do have a requirement to withdraw.

  You always have the option to convert your Traditional IRA into a Roth IRA. However, if you’re age 73 or older, you will have to take your RMD for the year before you convert. Remember, a Roth conversion is a taxable event. We encourage you to speak to a tax advisor about how a conversion could impact the taxes you owe.