Do 403(b) Plans Have RMDs? Exceptions, Deadlines, and Penalties

Yes. Traditional 403(b) plans are subject to required minimum distributions, and the 403(b) RMD rules track closely with those for 401(k) plans and traditional IRAs. Most participants must begin withdrawing by April 1 of the year after they turn 73, with the trigger age rising to 75 starting in 2033.¹ Contributions to a traditional 403(b) went in untaxed, and the IRS eventually wants its share. Roth 403(b) accounts follow a different rule, and there are a few exceptions worth knowing before you plan your first withdrawal.

When Your RMDs Start

The SECURE 2.0 Act, signed in late 2022, set the current age triggers. If you turned 72 after December 31, 2022, your RMDs begin at 73. A second bump takes effect in 2033, pushing the starting age to 75 for people who reach that milestone after 2032.²

Older participants stay locked to earlier thresholds. If you turned 70½ before 2020, that was your trigger. If you turned 72 between 2020 and 2022, your RMDs already started at 72 under the original SECURE Act. Once your required beginning date has passed, the newer, higher ages don’t help you.

Roth 403(b) Accounts Have No Lifetime RMDs

If your 403(b) contributions went into a designated Roth account, you’re off the hook during your lifetime. Starting in 2024, SECURE 2.0 eliminated RMDs for Roth 403(b) accounts while the original owner is alive.¹ Before that change, Roth 403(b) holders had to take RMDs or roll the money into a Roth IRA to avoid them. That workaround is no longer necessary.

The exemption only applies while you’re alive. After your death, beneficiaries face distribution requirements on the inherited Roth 403(b), though withdrawals remain tax-free as long as the account meets the five-year holding requirement.

The Still-Working Exception

If you’re past the trigger age but still employed by the organization sponsoring your 403(b), you can delay distributions from that specific account until the year you actually retire.¹ The provision helps teachers, professors, and nonprofit employees who keep working into their mid-70s.

The scope is narrow. The exception only covers the 403(b) with your current employer. A 403(b) from a previous job follows the normal RMD schedule regardless of your current employment. Any traditional IRAs you hold also require distributions at 73, working or not.¹ People who’ve changed jobs across a long career can easily end up with some accounts requiring distributions and others that don’t.

The Pre-1987 Balance Exception

This rule is unique to 403(b) plans and catches many people off guard. If your account holds money contributed before 1987, and the plan kept those amounts in separate accounting, the pre-1987 balance doesn’t follow the normal RMD schedule. Distributions on that portion can wait until December 31 of the year you turn 75, or April 1 after the year you retire if that’s later.¹

The key requirement is recordkeeping. The plan must have tracked pre-1987 contributions separately from post-1986 amounts all along. If those records don’t exist, the entire balance falls under the standard age-73 rules. Any distributions beyond your regular RMD amount are treated as coming from the pre-1987 balance first. This mainly affects long-tenured educators or nonprofit employees who started contributing decades ago and stayed in the same account.

How to Calculate Your 403(b) RMD

The math is straightforward. Take your total 403(b) balance as of December 31 of the prior year and divide it by a life expectancy factor from an IRS table. The result is the minimum you must withdraw for the current year.³

Most people use the Uniform Lifetime Table, published in IRS Publication 590-B. There’s one exception: if your sole beneficiary is your spouse and your spouse is more than 10 years younger than you, you use the Joint Life and Last Survivor Expectancy Table instead, which produces a smaller RMD because it assumes a longer combined payout period.⁴

You recalculate every year because both your balance and your life expectancy factor change. Withdrawing more than the minimum is always allowed, but any excess does not count toward next year’s RMD. Each year starts fresh.¹

Distributions from a traditional 403(b) are taxed as ordinary income in the year you receive them, at your marginal rate.¹

If You Have More Than One 403(b)

If you own more than one 403(b), calculate the RMD for each account separately, then take the combined total from just one of them. That lets you pull from whichever account makes the most sense: the worst-performing investments, or the one with the easiest withdrawal process.¹

Aggregation only works within the same account type. You cannot satisfy a 403(b) RMD by withdrawing from a 401(k) or a traditional IRA, and vice versa. Traditional IRAs have their own aggregation rule across multiple IRAs, but categories don’t mix.¹

Deadlines and the First-Year Trap

Your first RMD must be taken by April 1 of the year after the year you hit the trigger age, or after you retire if you qualify for the still-working exception. Every RMD after that is due by December 31.⁵

If you turn 73 in 2026, your first RMD is based on your December 31, 2025 balance and is due by April 1, 2027. Your second RMD, for the 2027 tax year, is due by December 31, 2027.⁴ Using the April 1 grace period means taking two taxable distributions in 2027.

That’s where people get hurt. Two RMDs in one year can push you into a higher tax bracket, increase the taxable portion of your Social Security benefits, and raise your Medicare premiums through the income-related adjustment. Taking your first RMD by December 31 of the year you turn 73, rather than waiting for the April 1 grace period, spreads the income across two tax years.⁴

Penalty for Missing an RMD

Fail to take a required distribution, or take less than you should, and the IRS imposes an excise tax of 25% on the shortfall.⁶ Before SECURE 2.0 the penalty was 50%, so the current rate is an improvement, but 25% of a missed distribution still stings.

If you catch the mistake and withdraw the missing amount within the correction window, the penalty drops to 10%. The window runs from the date the tax is imposed until the earlier of the date the IRS mails a notice of deficiency, assesses the tax, or the end of the second taxable year after the tax was imposed.⁶ In practice, that gives most people roughly two years to fix it.

To report and pay the penalty, or request a waiver, file IRS Form 5329. If the shortfall happened because of a genuine error, attach a written explanation. Enter “RC” for reasonable cause on the relevant line, and the IRS will review whether to waive the penalty.⁷ The IRS has historically been lenient with first-time mistakes when the taxpayer corrects the shortfall promptly and documents what went wrong.

Inherited 403(b) Accounts

When a 403(b) owner dies, the distribution rules shift depending on who inherits. For deaths after December 31, 2019, most non-spouse beneficiaries must empty the entire account within 10 years. There’s no option to stretch distributions over a lifetime the way the old rules allowed.¹

A narrow group of eligible designated beneficiaries can still use the longer life-expectancy method instead of the 10-year clock:⁸

A surviving spouse, who can take distributions over their own life expectancy or roll the account into their own retirement plan.
A minor child of the account owner, who can use life expectancy until reaching the age of majority, when the 10-year clock starts.
A disabled or chronically ill individual, who can stretch distributions over their own life expectancy.
A beneficiary not more than 10 years younger than the deceased, who can also use life expectancy distributions.

Everyone else, including adult children, siblings, friends, and non-qualifying trusts, falls under the 10-year rule. The account must be fully distributed by December 31 of the year containing the 10th anniversary of the owner’s death. There’s no required annual amount within that window, but waiting until year 10 to take everything as a lump sum creates an obvious tax spike.

A Note on Qualified Charitable Distributions

A qualified charitable distribution lets you send money directly from a retirement account to a charity, satisfying your RMD without adding to your taxable income. The catch for 403(b) holders is that QCDs can only be made from an IRA, not directly from a 403(b).⁹ You must be at least 70½ at the time of the distribution, and the annual limit was $108,000 per person in 2025, adjusted for inflation each year.

To use this strategy with 403(b) money, roll the funds into a traditional IRA first, then make the charitable distribution from the IRA. Check with your plan administrator to confirm your 403(b) allows rollovers, since some plans restrict in-service distributions while you’re still employed.

1
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
2
eCFR. 26 CFR 1.401(a)(9)-1 – Minimum Distribution Requirement in General
3
Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs) – Section: Calculating the Required Minimum Distribution
4
Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs)
5
Internal Revenue Service. IRS Reminds Retirees: April 1 Final Day to Begin Required Withdrawals From IRAs and 401(k)s
6
Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans
7
Internal Revenue Service. Instructions for Form 5329 (2025)
8
Internal Revenue Service. Retirement Topics – Beneficiary
9
Internal Revenue Service. Publication 590-B (2025), Distributions From Individual Retirement Arrangements (IRAs)