RMD Rules 2025: What You Need To Know Before Year End

Once you turn 73, the IRS requires you to start taking money out of your tax-deferred retirement accounts. These are called Required Minimum Distributions, and the penalty for missing them is steep: 25% of the amount you should have withdrawn.

The amount you must withdraw is based on your account balance and your life expectancy factor from the IRS tables. It is not optional. And if you have multiple retirement accounts, you must calculate the RMD for each one.

Here is something many people miss: if you are 73 or older, you must take your RMD for the year before you complete a rollover into an annuity. You cannot roll RMD-eligible funds into a new annuity contract.

Annuities can actually help with RMD planning. By converting a portion of your savings into guaranteed income, you simplify the withdrawal process. And with annuity payout rates still elevated, locking in income now means your RMD dollars go further.

If you have not taken your RMD yet this year, do not wait. The deadlines are strict and the penalties are severe.