When RMDs begin
Under the SECURE 2.0 Act of 2022, RMDs begin in the year you turn 73. Your first RMD must be taken by April 1 of the following year. All subsequent RMDs must be taken by December 31 of each year. Beginning in 2033, the starting age increases to 75.
One timing consideration worth noting: if you delay your first RMD to the April 1 deadline, you will also owe a second RMD by December 31 of that same year. Taking two distributions in one calendar year can have tax implications. A qualified tax professional can help you decide whether to spread those distributions across two years.
Which accounts are subject to RMDs
The rule is consistent across both IRA and Solo 401(k) plans. Pre-tax, tax-deferred accounts are subject to RMDs. Roth accounts are not.
How the amount is calculated
Your RMD for a given year is calculated by dividing your account balance as of December 31 of the prior year by a life expectancy factor drawn from IRS-published tables. The factor decreases as you age, which means the required percentage of your account grows over time.
If you hold multiple IRAs, you must calculate the RMD separately for each account. You can, however, take the combined total from any one or more of those accounts. IRA and Solo 401(k) accounts cannot be combined for this purpose; they are calculated and satisfied separately.
Why this matters for self-directed plans
Self-directed plans often hold illiquid assets such as real estate or private loans. Those assets do not generate cash on demand. If your plan is heavily invested in illiquid holdings, planning ahead for RMDs is important. You will need sufficient cash or liquid assets within the plan to meet your annual requirement without being forced to sell an investment under pressure.
The penalty for missing an RMD is significant. That topic is covered in What is the penalty for failure to take RMDs?.