RMD Calculator
The IRS requires you to withdraw a minimum amount from your retirement accounts each year starting at age 73. Missing your RMD triggers a 25% penalty on the shortfall.
RMD vs UK Pension Drawdown
The US RMD system and the UK pension drawdown system represent very different philosophies:
- US RMDs: Mandatory annual withdrawals from traditional retirement accounts (IRA, 401k, 403b, etc.) starting at age 73. The amount is calculated using IRS life expectancy tables. Roth IRAs are exempt. Inherited IRAs have a 10-year rule.
- UK Pension Drawdown: Since the 2015 pension freedoms, there are no mandatory withdrawals. You can keep your pension fund invested and draw any amount (or nothing) at any time after 55 (57 from 2028). You pay income tax on withdrawals above the 25% tax-free lump sum.
- Australian Super: Account-based pensions have minimum annual drawdown rates that increase with age (4% at 65–74, up to 14% at 95+). Similar in concept to RMDs.
- Canada RRIF: RRSP must convert to RRIF by age 71. RRIF has minimum annual withdrawals starting at 5.28% rising to 20% at age 95+ — Canada's version of RMDs.
| Country | Mandatory Withdrawal? | Start Age | Penalty if Missed |
|---|---|---|---|
| 🇺🇸 US (IRA/401k) | Yes | 73 (SECURE 2.0) | 25% of shortfall |
| 🇬🇧 UK (Pension) | No | N/A (voluntary from 55) | None |
| 🇨🇦 CA (RRIF) | Yes | 72 (RRSP → RRIF by 71) | Tax + penalty |
| 🇦🇺 AU (Account-based pension) | Yes (minimum %) | 65 | Ineligibility for tax concessions |
Frequently Asked Questions
What age do I need to start taking RMDs?
Under the SECURE 2.0 Act (2023), the required beginning date for RMDs was raised to age 73 (for those born between 1951 and 1959) and 75 (for those born in 1960 or later). Previously it was 72. Roth IRAs do NOT have RMDs during the owner's lifetime — a significant advantage over Traditional IRAs.
What is the penalty for missing an RMD?
SECURE 2.0 reduced the RMD failure penalty from 50% to 25% of the amount not withdrawn (or 10% if corrected within a correction window). You must also pay ordinary income tax on the RMD amount. The IRS may waive the penalty for first-time mistakes if you take the RMD promptly and request waiver.
Does the UK have RMDs?
The UK does not have RMDs. Since the 2015 pension freedoms reform, UK pension holders can keep funds in drawdown indefinitely and withdraw at any pace they choose after age 55 (rising to 57 in 2028). There is no mandatory withdrawal rule — a major difference from the US system. Canada's RRIF and Australia's account-based pensions do have minimum drawdown requirements similar to RMDs.