Required Minimum Distributions FAQ
Required minimum distributions (RMDs) are the amounts many people must take from certain retirement accounts after a set age. The IRS sets the rules. Your household still has decisions about timing, tax brackets, Social Security, Roth conversions, and which accounts to draw from first.
This page covers the questions we hear most often. It is education, not a personalized answer. If your situation is more layered than a chart, that is normal. Reach out and we can walk through your accounts together.
What is an RMD?
An RMD is a required withdrawal from accounts such as traditional IRAs and many workplace plans once you reach the applicable age under current law. Roth IRAs generally do not require RMDs for the original owner during life. Inherited accounts follow different rules.
The idea is simple. Tax deferred money eventually needs to come out. How and when it comes out can change your tax bill and your long term plan.
When do RMDs start?
The starting age has changed in recent years under federal law. Your birth year and account type matter. Do not rely on an older rule of thumb you heard from a neighbor. Confirm the age that applies to you, then build the rest of the plan around that date.
Missing an RMD can bring a penalty. Getting the first year timing right is worth a careful check.
How is the amount calculated?
Broadly, the IRS uses your account balance and a life expectancy factor. Custodians often calculate a number for you. You still own the tax outcome. Taking more than the minimum is allowed. Taking less is not.
If you have multiple IRAs, aggregation rules can apply. Workplace plans can have their own quirks. This is where a quick DIY estimate often drifts from what you should actually do.
How are RMDs taxed?
Withdrawals from traditional pre tax accounts are generally taxed as ordinary income. That income can affect Medicare premiums, Social Security taxation, and how much room you have for other strategies in the same year.
An RMD is not always just a line on a 1099. It can reshuffle the whole year.
What if I am still working?
Some workplace plans allow a delay for people who are still working and meet certain conditions. IRAs usually do not get that same break. Ownership of the company and plan rules matter. Ask before you assume the delay applies.
Can I give my RMD to charity?
Qualified charitable distributions can let eligible people send IRA amounts directly to charity under specific rules. Done correctly, that can satisfy an RMD without adding the same taxable income. Done incorrectly, it fails. This is a paperwork and timing conversation, not a last minute guess.
How do RMDs fit with Roth conversions and Social Security?
The years before RMDs begin can be a window for Roth conversions, charitable giving, or other tax planning. Once RMDs start, they fill some of the tax bracket space you might have used elsewhere. Social Security claiming and portfolio withdrawals often belong in the same conversation.
Online calculators treat these as separate buttons. Real households do not.
How our practice approaches RMDs
At Lēʻahi Private Wealth, we look at RMDs inside your wider plan: tax brackets, Medicare, Social Security, Roth opportunities, cash needs, and what you want left for a spouse or heirs. We can model options and help you decide whether to take only the minimum, coordinate across accounts, or use strategies such as charitable distributions when they fit.
Every balance, birth date, and account type combination is different. If you want a clear answer for your household, contact us. We will review your situation and help you leave with a plan you understand.
FAQ
Do Roth IRAs have RMDs?
Generally not for the original owner during life. Beneficiaries follow different rules. Confirm with your custodian and tax professional for your accounts.
What if I miss an RMD?
Penalties can apply. Talk with your tax professional promptly. Prevention is easier than cleanup.
Do Hawaii residents follow different RMD ages?
Federal RMD ages and calculation rules are national. Your Hawaii or mainland tax picture can still change how the withdrawal feels in your overall plan.
Author: Christian Park, Managing Advisor, Lēʻahi Private Wealth
Ready to map your RMD year?
If these questions hit close to home, do not settle for a generic age chart. Reach out to Lēʻahi Private Wealth. We will look at your accounts and help you answer what applies to you.
Educational information only. Not tax, legal, or personalized investment advice. Tax rules change. Confirm details with your tax professional and custodian. Advisory services offered through Kingswood Wealth Advisors (KWA), an SEC registered investment adviser. Securities services offered through Kingswood Capital Partners, LLC (KCP), member FINRA/SIPC.