I’m 75 and Still Working. Can I Avoid Taking RMDs?

Required minimum distributions (RMDs) are how the government collects taxes on pre-tax retirement savings. Starting at age 73, owners of traditional IRAs, 401(k)s and similar accounts must withdraw a minimum amount each year, triggering taxable income. RMDs generally do not apply to Roth IRAs.

Continued employment can be an exception for certain employer-sponsored plans. Even after reaching the age threshold, you may be able to delay RMDs from a current employer’s retirement plan if you are still working there, including on a part-time basis. This exception does not apply to IRAs.

A financial advisor can work with you to explore strategies for managing taxes in retirement. Connect with a financial advisor to discuss your situation and options.

What Are Required Minimum Distributions?

Beginning at age 73, you must begin withdrawing money from any pre-tax retirement accounts that you hold, including IRAs, 401(k)s, SEP IRAs, 403(b)s and any other similarly-situated portfolios. These withdrawals are taxed the same as any other retirement fund withdrawals, so they are part of your taxable income for the year.

This rule does not apply to Roth IRA plans. Since 2024, it no longer applies to Roth 401(k) and Roth 403(b) plans either. All inherited Roth plans are still subject to the 10-year withdrawal rule.

This is called a “required minimum distribution,” or “RMD.” Previously, it applied starting at age 70 ½. The SECURE 2.0 Act raised this age to 72 and then, from Dec. 31, 2022, to age 73.

You must take your minimum distribution by the end of each year, although how you structure those withdrawals is at your discretion. The IRS determines the amount you must withdraw from each portfolio using a formula that weights the portfolio’s balance against your age and life expectancy.

Calculating your RMDs doesn’t have to be a hassle. We built an RMD calculator can help you estimate how much your next withdrawal will be and when it’s due.

Required Minimum Distribution (RMD) Calculator

Estimate your next RMD using your age, balance and expected returns.

Quickly estimate your RMDs and when to take them

RMD Amount for IRA(s)

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RMD Amount for 401(k) #1

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RMD Amount for 401(k) #2

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About This Calculator

This calculator estimates RMDs by dividing the user's prior year's Dec. 31 account balance by the IRS Distribution Period based on their age. Users can enter their birth year, prior-year balances and an expected annual return to estimate the timing and amount of future RMDs.

For IRAs (excluding Roth IRAs), users may combine balances and take the total RMD from one or more accounts. For 401(k)s and similar workplace plans*, RMDs must be calculated and taken separately from each account, so balances should be entered individually.

^*The IRS allows those with multiple 403(b) accounts to aggregate their balances and split their RMDs across these accounts.

Assumptions

This calculator assumes users have an RMD age of either 73 or 75. Users born between 1951 and 1959 are required to take their first RMD by April 1 of the year following their 73rd birthday. Users born in 1960 and later must take their first RMD by April 1 of the year following their 75th birthday.

This calculator uses the IRS Uniform Lifetime Table to estimate RMDs. This table generally applies to account owners age 73 or older whose spouse is either less than 10 years younger or not their sole primary beneficiary.

However, if a user's spouse is more than 10 years younger and is their sole primary beneficiary, the IRS Joint and Last Survivor Expectancy Table must be used instead. Likewise, if the user is the beneficiary of an inherited IRA or retirement account, RMDs must be calculated using the IRS Single Life Expectancy Table. In these cases, users will need to calculate their RMD manually or consult a finance professional.

For users already required to take an RMD for the current year, the calculator uses their account balance as of December 31 of the previous year to compute the RMD. For users who haven't yet reached RMD age, the calculator applies their expected annual rate of return to that same prior-year-end balance to project future balances, which are then used to estimate RMDs.

This RMD calculator uses the IRS Uniform Lifetime Table, but certain users may need to use a different IRS table depending on their beneficiary designation or marital status. It's the user's responsibility to confirm which table applies to their situation, and tables may be subject to change.

Actual results may vary based on individual circumstances, future account performance and changes in tax laws or IRS regulations. Estimates provided by this calculator do not guarantee future distribution amounts or account balances. Past performance is not indicative of future results.

SmartAsset.com does not provide legal, tax, accounting or financial advice (except for referring users to third-party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States). Articles, opinions and tools are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. Users should consult their accountant, tax advisor or legal professional to address their particular situation.

You may take more than the minimum from your portfolio, and most households do, but you pay either a 10% or 25% tax penalty if you take less than the minimum. Talk to a financial advisor about the tax implications of your portfolio.

Required Minimum Distributions and Working

Continued employment can be an exception to RMD rules.

If you hold an individual retirement account, such as an IRA or SIMPLE IRA, and are over the cutoff age you must take your required minimum distributions. This is true even if you are still working in any capacity.

However you can delay taking RMDs from an employer-sponsored plan, such as a 401(k) or a 403(b), if you still work for that employer. There are a couple of specific requirements here:

You must be employed by the company, not contracting
You can only delay taking minimum distributions from a plan your employer sponsors
You cannot own 5% or more of the employer sponsoring this plan

There are no minimum hours to the employment rule. So, for example, say that you have stepped down from full-time to part-time. You can still delay taking your required minimum distributions until you fully retire.

But the current-employer rule is an important one. For example, say that you have retired but then take a part-time job at your local bookstore. You must take RMDs from your former employer’s 401(k) plan. The fact that you have started working somewhere else doesn’t change that requirement.

The same is true of any retirement plans you hold with former employers. The fact that you can defer RMDs from one employer-sponsored plan will not affect your requirements for other, previous employers’ plans. Although you may be able to get around this issue by rolling a former employer’s retirement plan to your new employer’s plan.

So, here, you are 75 and still working. The answer, then, is this: You can avoid taking RMDs from any retirement plan that your current employer sponsors. If you have a 401(k) or other plan with this employer, you don’t have to take distributions from it. If you have an IRA or a retirement plan with a former employer, you do have to take distributions from those.

If you’d like to discuss your personal situation with a financial advisor, get matched today.

Frequently Asked Questions

What happens if I miss an RMD?

If you fail to take the full RMD, the IRS may assess a penalty equal to 25% of the amount you should have withdrawn but did not. If you correct the mistake within a timely manner, the penalty can be reduced to 10%.

Can I take RMDs monthly instead of once per year?

Yes. You can take RMDs in a single lump sum or spread them out over the year through monthly or periodic withdrawals. As long as the total amount withdrawn by year-end meets or exceeds your required minimum, the IRS considers the requirement satisfied.

Do I have to take RMDs from each retirement account separately?

For IRAs, you can calculate the RMD for each account but withdraw the total amount from one or more IRAs of your choice. Employer-sponsored plans, such as 401(k)s and 403(b)s, generally require you to take RMDs separately from each plan.

Does working part time qualify for delaying RMDs?

Yes. There is no minimum hour requirement. As long as you are still employed by the company that sponsors your retirement plan and meet the ownership rules, you may be able to delay RMDs from that plan.

Bottom Line

Continued employment can be an exception to the rules around required minimum distributions. You don’t have to take distributions from a plan that your employer sponsors as long as you keep working for that employer.

Retirement Withdrawal Tips

Required minimum distributions aren’t an issue for most people, because you will need to withdraw income from your retirement account anyway. But one of the most important parts of retirement planning is figuring out what that income will look like, and how to structure it.
A financial advisor can help you build a comprehensive retirement plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.