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Required Minimum Distributions (RMDs): What’s actually required?

Posted on June 2, 2023
Woman working

Retirement doesn’t mean the same thing it used to for most of us. Recent surveys have shown that more than 90 percent of Americans aged 45 and older said they plan to continue to work fulltime for up to a decade (or more!) after the traditional retirement age of 65.

If you’re one of the many who plan to work well into your 70s, and still contribute to a 401k, 403b or other tax-advantaged retirement plan through your employer, consider this: once you reach a certain age, the IRS requires that you begin taking Required Minimum Distributions (RMDs) from your retirement accounts. The age at which you must begin RMDs depends upon the year you were born.

Birth Year RMD Age
Born before 7/1/49 70 1/2
Born after 6/30/49 and before 1/1/51  72
Born between 1/1/51 and 12/31/59 73
Born after 1959 75







The amount you’re required to withdraw as your RMD will vary depending upon the balance in your account and your life expectancy (the IRS publishes life expectancy tables that can help you calculate the amount you’re required to withdraw). Failing to take your RMDs on time can result in a significant tax penalty!

But do you have to take RMDs if you are still working? Not necessarily. You may be able to delay your first RMD if you are still working for the employer who sponsors the plan if the plan allows for a delay in taking RMDs.

Important to note: delays are permitted for employees who do not own more than 5% of the business. If you own more than 5% of the business, then you must begin RMDs at your IRS-set RMD age.

Here’s an example: Mary was born in 1950 and is still working for the employer who sponsors her 401(k) plan. The plan allows the delay of RMDs until retirement, and she does not own more than 5% of the business. Although Mary turned 73 in 2023, she does not have to take an RMD until she retires.

Keep in mind: this only works for your 401(k) at your current employer. If you have a 401(k) from a previous employer, then the RMD rule would still apply to that account. Additionally, these rules only apply to workplace plans, not traditional IRAs. If you have this type of IRA, you can’t avoid taking your RMDs.

Delaying required minimum distributions from your workplace plan has its advantages. For one thing, it allows you to continue growing your retirement savings on a tax-deferred basis. And, with 401k plans, 403b plans and 457 plans, your savings aren’t taxed until you withdraw the money in retirement. So, if you plan to work indefinitely, you can put off paying taxes on the earnings in your account until you’re ready to use the money, and you can also continue making contributions to your plan past your RMD age and beyond — as long as you’re still working.

Make sure you understand the RMD rules. If retirement is not in the near future for you and you want to explore putting off your RMDs, it may help to talk to your financial advisor or a tax planning expert about delaying them or directing the payments to make qualified charitable distributions to support your favorite causes.

If you have questions or if you would like to learn more about how you can use your RMDs to make tax-smart charitable gifts to support Drexel University or the College of Medicine, contact David Toll, JD, senior associate vice president in Drexel’s Office of Gift Planning at (215) 895-1882 or

Posted in Tax Smart Giving, Retirement Assets

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