Do the ins and outs of required minimum distributions (RMDs) from individual retirement accounts (IRAs) have you feeling a bit overwhelmed? Maybe you’re turning 73 years old this year and will soon be taking your first-ever required distribution from an IRA, and you want to make sure you get it right.

Don’t panic! RMDs aren’t as complicated as you might think. You’ve also got more resources and plenty of time to get it right. Just ask! Before doing anything RMD-related for tax year 2024, there are five easily avoidable mistakes you’ll want to make sure you sidestep.

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What’s an RMD?

Required minimum distributions are taxable withdrawals from ordinary (non-Roth) IRAs that the Internal Revenue Service (IRS) forces you to take. If you’ve already retired, you’ve likely been making taxable withdrawals from your retirement savings anyway.

To make sure it eventually collects the taxes that might have been postponed by leaving money in an IRA, the IRS requires anyone who will be 73 years old or older this year to remove money from these accounts every year. The “minimum” amount depends on your age and the value of the account in question as of the end of last calendar year. The older you are, the greater the percentage of money that must be removed.

This explanation may raise as many questions as it answers, which if left unanswered can lead to costly mistakes like IRS penalties. To make sure that doesn’t happen to you, here are the top five things you’ll want to make a point of not doing.

5 frequent RMD mistakes to avoid

1. Not withdrawing enough… or any

If you don’t withdraw enough — or any — money from a retirement account that’s subject to RMDs, the IRS will know, and may penalize you accordingly. The IRS knows how much you should be collectively withdrawing from your retirement accounts. Brokerage firms, IRA custodians, and retirement plan administrators report the relevant year-end numbers regarding your account to the IRS.

How do you know what your RMD is for any given year? Your broker, custodian, or retirement plan administrator will give you a year-end tax form 5498, which tells you the amount you should use to determine your yearly RMD based on the IRS’ RMD calculation table. Your broker or custodian may even calculate your RMD for you.

The organization will only be able to give you a specific RMD number based on the retirement accounts you hold with that company. If you’ve got more than one IRA with one or more brokerage firms or custodians, you’ll need to combine these numbers to determine your total RMD for any particular year.

The good news is, you don’t have to take each retirement account’s calculated required distribution from that exact same account. You can combine your calculated RMD and remove it all from just one IRA, or from any combination of these accounts. The IRS doesn’t care how the total distribution is made. It just cares that you withdraw the full dollar amount of your combined RMDs from your individual retirement accounts as a whole.

There’s an important exception to this rule, however.

2. Not taking an RMD from a 401(k) account

While you can mix-and-match each regular IRA’s RMD calculation into a sum-total figure and remove this money from any combination of ordinary retirement accounts, this doesn’t apply to most 401(k) accounts. If you’re no longer working, but you’ve still got money sitting in a former employer’s 401(k) (as opposed to a rollover IRA), you must withdraw your RMD calculated by this plan’s administrator for this account from that specific account. If you’ve got more than one funded 401(k) account — even if you’re no longer employed by their sponsors — you must take at least the calculated RMD from each separate account.

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If you’re 73 years old or older but still working, your 401(k) account with that employer isn’t subject to required distribution rules, unless you’re also an owner of 5% or more of the company.

The RMD rules for 403(b) accounts fall somewhere in between. Although any RMD calculation for a 403(b) account can only be combined with the calculated minimum distributions for any other 403(b) and must only come out of 403(b) savings, you’re allowed to take this total distribution from these collective accounts in any combination you like.

3. Not treating spouses’ RMDs as completely separate transactions

While most tax laws tend to treat spouses pretty equally — like being eligible to make IRA contributions, even if only one spouse is traditionally employed at a job that results in a W2 form — RMD rules aren’t quite as flexible. One spouse’s calculated RMD can only be satisfied by withdrawing money or assets from that particular spouse’s individual retirement account(s). Again, getting this wrong can result in penalties in addition to being required to undo the action.

4. Making a charitable contribution that isn’t classified as a QCD

If you’re fortunate enough to not need the money the IRS is forcing you to remove from your retirement account and you’re planning on giving it away anyway, consider directing some or even all of your required withdrawal directly to a qualified eligible charity through a qualified charitable distribution, or QCD.

A qualified charitable distribution is a gift to a legitimate charity. Unlike other such giving that’s tax-deductible, QCD limits can be considerably higher than many people typically enjoy at tax time. For 2025, a filer can give up to $108,000 of an IRA withdrawal without any of this amount needing to be reported as taxable income. The figure’s double that ($216,000) for joint filers.

Best of all, this gift still satisfies RMD rules. There’s no tax form to fill out, either. This giving is simply noted on a 1099 form, and reported on the front page of a 1040. That being said, it’s a good idea to get a confirming receipt from the charity you’re making your gift to. You’ll need its routing or delivery instructions anyway.

You can take an ordinary/taxable RMD and make a QCD in the same tax year. Just make your charitable distribution first, to ensure that the entirety of the gift is counted toward your RMD, since RMDs can’t be reclassified as QCDs later. Doing so may also lower your taxable income for the year in question.

5. Missing the distribution deadline

The IRS expects RMDs to be completed by the end of the calendar and personal tax year (Dec. 31). Initiate the process early enough to make sure it happens in time. Brokerage firms, IRA custodians, and 401(k) plan sponsors and administrators aren’t required to ensure you take care of this business in a timely manner.

There’s one noteworthy exception to this rule. If this is the first year you’re subject to RMDs (meaning you’re turning 73 years old in 2025), you’ve actually got until April 1 of next year to complete the task.

You still may not want to wait that long. Any RMD is reported as taxable income for the year in which it’s completed. Waiting until 2026 to take your first required distribution, and then also taking your second one before the end of calendar 2026, will mean two taxable IRA withdrawals in the same tax year. This could needlessly bump you into a higher tax bracket. Maybe this option makes financial or strategic sense for you. For most people, though, there’s no additional benefit — just more potential cost.

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