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RMD required
401(k) Plan
A 401(k) is an employer-sponsored retirement plan that lets employees save pre-tax dollars (or Roth dollars) from their paycheck into a tax-advantaged investment account.
Who might have one?
- Employees at for-profit companies that offer the plan
- Workers who contribute through automatic payroll deductions
- People with old 401(k) balances from previous employers
- Some self-employed business owners with a solo 401(k)
Why would you have one?
- Get an employer match — free money toward retirement
- Save automatically before you spend your paycheck
- Reduce current taxable income with pre-tax contributions
- Access a curated menu of investments through your employer
How RMDs work for this account
RMDs from 401(k) plans must be calculated separately for each plan and withdrawn from that plan — you cannot aggregate 401(k) RMDs with IRAs or other 401(k)s. If you are still working for the company that sponsors the plan, you may delay RMDs from that plan until you retire.
Common mistakes
- Assuming 401(k) RMDs can be taken from an IRA instead
- Leaving old 401(k)s at former employers and losing track of RMD deadlines
- Not knowing the still-working exception only applies to the current employer's plan
Frequently asked questions
- Does a 401(k) require RMDs?
- Yes, unless you are still working for the employer that sponsors the plan (and the plan allows delay). Roth 401(k) sub-accounts follow separate rules since 2024.
- Can I take my 401(k) RMD from my IRA?
- No. Each 401(k) plan's RMD must be satisfied from that plan. IRA aggregation rules do not apply to 401(k)s.
Related account types
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