When Does Your RMD Stop?
Required Minimum Distributions (RMDs) are mandatory withdrawals that retirees must take from tax-deferred retirement accounts such as traditional IRAs, 401(k)s, 403(b)s, and other similar plans. While the age at which RMDs start is well-known—currently age 73 (or 75 for those born in 1960 or later, under SECURE Act 2.0)—many retirees wonder if there’s ever a point when RMDs stop. The answer depends on the type of retirement account and whether you’re the original account owner or a beneficiary.
RMDs for Original Account Owners
If you are the original owner of a traditional IRA or 401(k), RMDs do not stop at a certain age. You must continue taking RMDs every year for the rest of your life, starting at your required beginning age. The amount you must withdraw each year is based on your account balance and a life expectancy factor provided by the IRS.
There is no upper age limit where RMDs stop. Whether you’re 80, 90, or 100, as long as you have money in the account, the IRS requires you to take annual distributions and pay income taxes on them.
What About Roth Accounts?
Roth IRAs are different. The original owner of a Roth IRA is not required to take RMDs at any age during their lifetime. This makes Roth IRAs a powerful estate planning tool, as the funds can continue to grow tax-free indefinitely. However, beneficiaries of inherited Roth IRAs are subject to RMD rules, depending on the circumstances and relationship to the deceased.
Inherited Accounts and RMDs
If you inherit a retirement account, the RMD rules can change. Most non-spouse beneficiaries must fully distribute the inherited account within 10 years, according to the SECURE Act. However, certain eligible designated beneficiaries (like a surviving spouse or a disabled person) may be able to stretch RMDs over their lifetime.
Final Thoughts
There is no age when RMDs stop for the original owner of a traditional retirement account. You are required to take them annually for life. Planning ahead by considering Roth conversions or qualified charitable distributions (QCDs) can help manage the tax impact of RMDs in your later years.
Understanding how long RMDs last—and planning accordingly—can help ensure a more tax-efficient retirement and leave a larger legacy for your heirs. If you are unsure, contact us today for expert aid. Dimov Tax presents professional guidance with RMDs.