The 403(b) required minimum distribution rules force you to start pulling taxable money out of a traditional 403(b) once you reach a set age, using an IRS formula tied to your prior-year balance. For most people that age is 73, the first withdrawal is due by April 1 of the year after you hit the trigger age, and every distribution after that is due by December 31. Miss the amount and the IRS charges a 25% excise tax on whatever you should have taken but didn’t.
When You Have to Start
Your starting age depends on when you were born. SECURE Act 2.0 pushed the threshold up in stages:
- Born 1951 through 1959: RMDs begin at age 73.
- Born 1960 or later: RMDs begin at age 75.1Congress.gov. Required Minimum Distribution (RMD) Rules for Original Owners of Retirement Accounts
The first distribution is technically for the year you reach the applicable age, but you have until April 1 of the following calendar year to actually take it. Every RMD after that is due by December 31 of its own year.2Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs) Waiting until April 1 means two RMDs land in the same tax year, which can raise your bracket and push up your Medicare premiums. Taking the first one in the year you actually turn the trigger age usually costs less.
Still Working for the Plan Sponsor
If you’re still employed by the organization sponsoring your 403(b), you can postpone RMDs from that plan until April 1 of the year after you retire. You have to own less than 5% of the sponsoring organization, and the plan document itself has to permit the delay.3Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs The delay only covers the plan at your current employer. A 403(b) from an old job, an IRA, or any other retirement account still runs on the standard age schedule.
Roth 403(b) Balances
Starting in 2024, designated Roth accounts inside a 403(b) are no longer subject to RMDs at all. If everything you hold in the plan is Roth, you have no distribution requirement. If the plan holds both traditional and Roth money, only the traditional portion generates an RMD.
How to Calculate the Amount
Take the account balance as of December 31 of the prior year and divide it by the life expectancy factor for your age in the distribution year.2Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs) Most account holders use the IRS Uniform Lifetime Table. At age 73 the factor is 26.5, so a $530,000 balance produces a $20,000 RMD. At age 80 the factor falls to 20.2, and a bigger slice of the account has to come out.
One substitution matters. If your spouse is your sole primary beneficiary and is more than ten years younger than you, use the Joint Life and Last Survivor Expectancy Table instead. Its larger divisor produces a smaller RMD.2Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs) Everyone else uses the Uniform Lifetime Table.
Two 403(b) Quirks That Can Help You
Pre-1987 Balances
Contributions made to a 403(b) contract before January 1, 1987, and the earnings on them, don’t follow the standard age-73 schedule. They don’t have to be distributed until December 31 of the year you turn 75, or April 1 of the year after you retire if that comes later.3Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
The exclusion depends entirely on records. The plan must have tracked pre-1987 amounts separately since the late 1980s, and the plan document has to allow the carve-out. If the administrator can’t distinguish those balances, the whole account defaults to the normal schedule. If you’ve been with the same employer since before 1987, ask whether your pre-1987 balance is still being accounted for separately.
Aggregating Multiple 403(b) Accounts
If you own more than one 403(b), calculate the RMD separately for each based on its own year-end balance. Then you can take the combined total from any one contract, or split it however you want.4Internal Revenue Service. RMD Comparison Chart (IRAs vs. Defined Contribution Plans) That lets you empty the account with poor returns or high fees while leaving stronger ones alone. Aggregation only works within 403(b) contracts. You cannot cover a 403(b) RMD by pulling from an IRA, and 401(k) accounts stand alone entirely.
Qualified Charitable Distributions Don’t Work Here
QCDs let you send money directly from a retirement account to charity and satisfy an RMD without adding to taxable income, but they’re only available from individual retirement plans such as traditional and inherited IRAs.5Office of the Law Revision Counsel. 26 U.S. Code 408 – Individual Retirement Accounts A 403(b) is not eligible. Rolling the balance into a traditional IRA after you separate from service opens the door, but rolling pre-1987 money into an IRA strips away its separate RMD treatment.
Missing an RMD
The IRS charges an excise tax of 25% on the shortfall — the difference between what you should have withdrawn and what you actually took. The rate drops to 10% if you correct the mistake within a window that generally runs through the end of the second tax year after the shortfall year, meaning you withdraw the missed amount and file a return reflecting the tax.6Office of the Law Revision Counsel. 26 U.S. Code 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans
Asking for a Full Waiver
If the missed RMD was a genuine error, you can request that the IRS waive the penalty. File Form 5329 with a written explanation showing reasonable cause. On the form itself, write “RC” and the amount you want waived on the dotted line next to the penalty line, then subtract it from the total shortfall.7Internal Revenue Service. Instructions for Form 5329 The IRS reviews these individually and tends to grant them when the account holder took the missed distribution promptly after finding the mistake. Common reasonable-cause situations include a plan administrator’s processing error, serious illness, or confusion about a recently changed required beginning date.
Inherited 403(b) Accounts
If you inherit a 403(b) from someone who died after December 31, 2019, the SECURE Act’s ten-year rule usually applies to non-spouse beneficiaries: the entire account has to be emptied by December 31 of the tenth year after the owner’s death.3Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
Some beneficiaries are exempt and can stretch withdrawals over their own life expectancy:
- A surviving spouse, who can also roll the money into their own IRA or 403(b) or keep it as an inherited account and delay RMDs until the deceased would have reached RMD age.
- Minor children of the account owner, who use the life expectancy method until they reach the age of majority, at which point the ten-year clock starts.
- Disabled or chronically ill individuals.
- Beneficiaries no more than ten years younger than the deceased.
If the original owner had already started RMDs, a non-eligible beneficiary must keep taking annual distributions during the ten-year window rather than waiting for a lump sum at the end. Missing those yearly amounts triggers the same excise tax on the shortfall.