Certain retirement accounts let money sit without being taxed yet — and tax law doesn't let that run forever. Once you reach a specified age, you're required to start withdrawing a minimum amount each year. Miss it and there are penalties, which is why this one is worth having on your calendar well in advance.
Why the Rule Exists
Money that hasn't been taxed yet eventually has to be. The requirement exists so these accounts don't become permanent shelters that pass down untouched forever.
That's the whole logic. It isn't a penalty on saving; it's the other end of the deal.
What It Means in Practice
Once the requirement starts, part of your income each year isn't optional — the withdrawal happens whether you need the money or not, and it lands in your tax picture for that year.
That can push people into a different tax position than they expected, especially alongside other income. Planning ahead is the difference between managing it and being surprised by it.
Get the Ages and Amounts From Your CPA
We're not publishing ages, percentages or calculation tables here. They're set by law, they have changed more than once in recent years, and which accounts the rule applies to is not uniform.
Your CPA will tell you what applies to your accounts and when. If you want to think about the order you draw from across everything you own, that's worth a longer conversation.
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