RMD Clarity

Understanding Required Minimum Distributions

Required Minimum Distributions (RMDs) are mandatory withdrawals from certain retirement accounts once you reach the age set by the IRS, and they play a bigger role in your retirement than many people expect. While they’re often viewed as just another rule to follow, have you ever considered how those required withdrawals could impact your taxes, Medicare premiums, or even the longevity of your savings over time? Understanding how RMDs work can help you avoid costly penalties and make more informed decisions about how and when your retirement savings are used. With thoughtful planning, RMDs can become part of a coordinated income strategy—supporting your overall retirement plan rather than simply checking a box each year.

RMD Basics

What You Should Know About RMDs

Required Withdrawals

RMDs are mandatory withdrawals from certain retirement accounts. As these RMD increase in size year after year, are they going to cannibalize your retirement savings and principal.  Don’t let the government exhaust what you’ve worked so hard to build and save.

They typically apply to accounts such as:

  • Traditional IRAs
  • Employer retirement plans such as 401(k)s
  • Other qualified retirement accounts

Withdrawals are required once you reach the age established by the IRS.

How RMDs Are Calculated

Required Minimum Distributions are calculated based on:

  • Your retirement account balance
  • IRS life expectancy tables

For many retirees, initial withdrawals begin at roughly 4% of the account balance, increasing gradually over time.

RMD Strategy

Managing Your RMD Strategy

Required Minimum Distributions can impact your taxes, retirement income, and overall financial strategy, but with thoughtful planning, they can be managed in ways that support your long-term goals. When incorporated into a broader retirement income strategy, RMDs become a coordinated part of your financial plan rather than an unexpected obligation.

  • Planning ahead for increasing withdrawals so required distributions do not unexpectedly increase your tax burden

  • Coordinating your retirement accounts and tax strategy to manage how RMDs affect your income

  • Deciding how to use your RMD income—whether for spending, gifting, reinvesting, or charitable giving

Avoid Costly Penalties

We help ensure your Required Minimum Distributions are calculated correctly so you can avoid unnecessary IRS penalties.

Reduce Tax Impact

We help you understand strategies that may help reduce the long-term tax impact of your required withdrawals over time.

Integrate RMD Strategy

We help integrate RMDs into your broader retirement income strategy, so your withdrawals support your overall financial plan.

RMD Essentials

RMD Planning Essentials Guide

  • Know when RMDs begin and how they’re calculated: Understand the age requirements set by the IRS and how your account balances and life expectancy factor into the amount you must withdraw each year.
  • Plan for taxes and increasing withdrawals over time: RMD amounts typically grow as you age, which can increase your taxable income—planning ahead may help you manage the long-term tax impact.

  • Distributions with your overall retirement strategy: Your withdrawals should support your income needs and financial goals, whether that means spending, reinvesting, gifting, or coordinating with other income sources.

A Member of Retirement Income Source

Johnson Wealth & Income Management is a proud member of Retirement Income Source, a national network of financial advisors who specialize in income-generating investment strategies designed to help protect retirement savings.

Through this network, our advisors have access to research, strategies, and resources focused on helping retirees develop reliable income streams designed to support financial peace of mind throughout retirement.

Schedule a Meeting

Start a Conversation

Whether you are preparing for retirement or already retired, having a conversation about your financial future can bring valuable clarity. Our meetings are simply an opportunity to ask questions, explore your options, and better understand the decisions ahead—without pressure or obligation.