Under 26 U.S.C. §401(a)(9), a Required Minimum Distribution (RMD) is the mandatory withdrawal from qualified retirement accounts beginning at the owner’s applicable starting age. These rules also govern payouts after the owner’s death, but timing depends on the beneficiary. Eligible beneficiaries (such as a spouse, minor child, or a disabled individual) may use life-expectancy payouts. Most other beneficiaries are subject to the 10-Year Rule, including qualifying “see-through” trusts. The 5-Year Rule applies only if the owner died before starting RMDs and named a beneficiary that is not a living individual (such as an estate or a non-qualifying trust). Distributions from retirement accounts that grew tax-deferred are taxed as ordinary income.
