How to Take Your RMD: Step-by-Step

You know you're required to take a distribution. You may have even calculated the amount. But how do you actually initiate it — which account, which method, how much to withhold for taxes? This guide covers the mechanics of executing an RMD from start to finish, whether it's your first or your twentieth.

Step 1: Know your required amount

Your RMD amount is calculated by dividing your prior December 31 account balance by a life expectancy divisor from the IRS Uniform Lifetime Table (Table III). At age 73, the divisor is 26.5 — so a $500,000 IRA produces a $18,868 RMD. At 80, the divisor is 20.2 — that same account (at the same balance) would owe $24,752.¹

Most major custodians calculate your RMD automatically and display it in their RMD Center or Required Distributions portal. But you should verify the number yourself — custodians occasionally use an outdated December 31 balance or the wrong life expectancy table (Table II applies if your spouse is the sole beneficiary and more than 10 years younger).

Use our RMD Calculator to check the math independently. Enter your age, December 31 balance, and whether you qualify for the younger-spouse Table II exception.

Step 2: Choose which account to take from

For traditional IRAs, the aggregation rule gives you flexibility: calculate the RMD across all your IRAs but satisfy it from any single account. The main reasons to favor one over another:

• Take from cash or money market — avoids forced selling of equity positions at an inopportune time. Keep 1–2 years of RMDs in liquid assets inside the IRA.
• Take from the account with the highest fee — if you're reducing an account anyway, drain a higher-cost account first.
• Take from the account holding fixed income — if you have a three-bucket approach, the short-term/bond bucket is the natural first draw.
• Take from the account where you want to give the QCD — the direct-transfer requirement for Qualified Charitable Distributions means the distribution must come from the IRA to the charity, not from your bank account to charity. Plan this before initiating any cash RMD first.

Important: 401(k) plans are separate. If you have a traditional 401(k) from a former employer, you cannot satisfy that plan's RMD from your IRA. Each 401(k) requires its own RMD taken directly from that plan. See our 401(k) RMD Rules guide and RMD Aggregation Rules for details.

Step 3: Choose your distribution method

You have several ways to receive your RMD. Which is best depends on whether you need the cash, have a charitable intent, or want to avoid selling during market volatility.

Step 4: Make your tax withholding election

RMD distributions are fully taxable as ordinary income — but federal income tax is not automatically withheld at the right rate. You need to make an affirmative withholding election or plan to cover the tax through quarterly estimated payments.³

Form W-4R (Withholding Certificate for Nonperiodic Payments) governs IRA RMD withholding. The rules:

• Default: 10% federal income tax withheld if you file no W-4R instruction
• Your choices: Any rate from 0% to 100%, specified in writing to your custodian
• For non-U.S. addresses: You cannot elect below 10%; minimum 10% applies
• State withholding: Many states have separate withholding requirements or defaults; check with your custodian or your state's tax agency

Is 10% enough? Usually not for a retiree with a $1M+ IRA whose total income — RMDs, Social Security, pension — puts them in the 22% or higher federal bracket. Underpay enough and you may owe an underpayment penalty on top of the tax bill.

Two approaches to avoid a surprise April 15 bill:

1. Higher withholding rate: Elect 22% or 25% on Form W-4R to approximate your actual marginal bracket. Adjust if your total retirement income picture changes.
2. Year-end lump-sum withholding strategy: Take your RMD as a single December distribution with high withholding (e.g., 40–50%). The IRS credits withholding ratably across the year regardless of when withheld, so a December withholding covers January–November shortfalls. This lets you invest the pre-tax RMD amount for most of the year and use a single December distribution to settle up. See our RMD Tax Withholding Guide for the full mechanics.

Step 5: Submit the distribution request

The mechanics at major custodians are similar: log in to your account, navigate to the RMD or distributions section, enter the amount, choose the method and destination, set withholding, and submit. Here's where to look at the main platforms:

Most custodians also offer an automatic RMD service — you set up an annual schedule and they calculate and distribute automatically each year. This removes the risk of missing the December 31 deadline. The tradeoff: you lose flexibility to time the distribution strategically (e.g., December lump-sum withholding, coordinating with a Roth conversion, or making a QCD first).

Timing your RMD during the year

You have the full calendar year (January 1 – December 31) to take each annual RMD. The timing choice involves real trade-offs:

• Early in the year (January–March): Gets the obligation out of the way; reduces the chance of forgetting. But the distributed cash can't compound tax-deferred for the rest of the year.
• Mid-year: No particular advantage. Best reserved for retirees who need monthly income and are simply spreading distributions evenly.
• Late in the year (October–December): Allows the full-year tax-deferred growth. Also makes the year-end withholding strategy practical (one large December distribution with high withholding can cover the whole year's tax). Risk: custodian processing delays near year-end. Submit by mid-December to be safe — some custodians have December 28 or 29 processing cutoffs.

If you're in the first year of RMDs and considering using the April 1 extension, read our RMD Starting Age guide on the double-RMD trap first. Most advisors recommend taking the first RMD in December of the turning-73 year rather than delaying — one distribution per year is cleaner than two in the extension year.

What to expect: Form 1099-R

Your custodian will send a Form 1099-R in January after the distribution year. The key boxes:

• Box 1 (Gross distribution): The total amount distributed from the account, including any amount withheld for taxes
• Box 2a (Taxable amount): Usually the same as Box 1 for a fully deductible traditional IRA; may be less if you have a non-deductible basis tracked on Form 8606
• Box 4 (Federal income tax withheld): The amount withheld; appears as a tax credit on your Form 1040
• Box 7 (Distribution code): Code 7 for a normal distribution from an IRA to someone over 59½

If you did a QCD, your 1099-R will show the full gross amount in Box 1 as if it were taxable — the custodian does not know the money went to charity. You manually reduce your Line 4b on Form 1040 and write "QCD" next to it. See our 1099-R and RMD guide for the complete Form 1040 reporting walkthrough.

If you have non-deductible IRA contributions, you'll need to file Form 8606 to claim the tax-free portion of each distribution. See our Non-Deductible IRA RMDs guide.

Sources

1. IRS Publication 590-B (2025) — Distributions from Individual Retirement Arrangements. IRS Uniform Lifetime Table (Table III) divisors; aggregation rules for traditional IRAs; April 1 Required Beginning Date; QCD direct-transfer requirement.
2. Charles Schwab — Reducing RMDs with QCDs (2026). 2026 QCD annual limit of $111,000 per individual; first-dollars-out rule; direct-transfer requirement; IRMAA impact.
3. IRS — About Form W-4R, Withholding Certificate for Nonperiodic Payments. Default 10% federal withholding rate on nonperiodic IRA distributions; elective range of 0–100%; mandatory minimum of 10% for foreign-address recipients.
4. Fidelity — Qualified Charitable Distributions and RMDs. QCD process mechanics, custodian check issuance, and why QCDs must precede any cash distribution in the same tax year.

Withholding rates and QCD limits verified against IRS Form W-4R instructions and IRS Publication 590-B. QCD 2026 limit ($111,000) per IRS Rev. Proc. 2025-32. Values current as of June 2026. Distribution rules subject to change; verify at irs.gov before acting.