Required minimum distributions (RMDs)
What they are: once you reach a set age, the IRS requires you to withdraw a minimum amount each year from tax-deferred accounts — Traditional IRAs and most 401(k)s — and pay income tax on it.
Why they exist: that money was never taxed. RMDs are how the deferral ends.
Why they matter before you retire:
• The required percentage RISES with age, so a large balance can push you into a higher bracket in your 80s than you were in while working
• They can trigger higher Medicare premiums and make more of your Social Security taxable
• Missing one carries a steep penalty
Roth accounts have no RMDs for the original owner — which is part of why the Roth-vs-Traditional decision is not purely about brackets.
Chart: the required percentage climbing with age.