Why and when you must take money from your retirement savings

What are my withdrawal options?

You generally have three options for your RMD withdrawal:

1. You can receive the money in your bank account electronically. (Preferred)
2. We can mail a check to your address.
3. You can withdraw the money and put it toward after-tax accounts. After-tax accounts include brokerage accounts, mutual fund accounts, after-tax annuities and college savings funds.

How do I set up withdrawals?

You can review your required minimum distributions by logging in to your account from the My Account tab. If your plan allows it, you can withdraw money online. If an online withdrawal is not an option, call us at 800-842-2252. Please be sure to contact us two to three months before you must receive your withdrawal to ensure you receive funds by the required deadline.

How are RMDs calculated?

The amount is based on your account balance at the end of the previous year and, generally, the life expectancy factor provided by the IRS in the Uniform Lifetime Table. Your RMD will change every year based on those two numbers. Amounts in Roth accounts should be excluded from the year end account balance for any required minimum distributions due after 2023. Please note: If you're participating in a 403(b) retirement plan, any contributions and earnings credited before 1987 are not subject to RMDs until the year you turn age 75 if such balances are separately accounted for by the plan and the plan permits. Keep in mind that any withdrawals you take before you are subject to the minimum distribution requirements, or withdrawals for more than the required amounts, will reduce your pre-1987 balance first.

You can call TIAA at 800-842-2252 for more information about the amount you need to take this year.

When do I need to take a withdrawal?

You generally have to take a distribution each year from employer-sponsored plans, including 401(a), 401(k), 403(b), 457(b) and other defined contribution plans, when you reach your required beginning date (RBD) age or retire, whichever is later (plan permitting). In the first year for which you are required to take RMD, you have two choices: You can take your first withdrawal (the amount required for the first year) in that year (e.g., 2023); or, you can wait and take it in the next year (2024), as long as it is paid by April 1. However, if you wait until the next year to take your first withdrawal, you'll have to take two withdrawals in that year—one for the amount required in the first year (2023) and one for the next year (2024)—which may increase your tax liability.

Must I withdraw from my traditional IRA?

You're required to start taking annual distributions from traditional IRAs no later than April 1 of the year following the year you reach your RMD Applicable Age, regardless of employment status (e.g., if you reach 73 in 2024, you must begin taking distributions by April 1, 2025). Minimum distribution rules don't apply to Roth IRAs during the owner's lifetime, though they may apply to the beneficiary that inherits the Roth IRA.

Are there other RMD options to consider?

When evaluating your required minimum distribution strategy, you may want to consider lifetime income options that provide you with guaranteed income that cannot be outlived. Keep in mind if you have been a long-term contributor to TIAA Traditional, you may receive additional amounts of income by creating a stream of guaranteed income.

In some cases, creating a guaranteed income stream may provide higher amounts of income in retirement while satisfying your required minimum distribution requirements. Our retirement specialists are available to discuss our range of flexible income options and choices. For additional information, please call us at 800-842-2252, weekdays, 8 a.m. to 10 p.m. (ET). Any guarantees under annuities issued by TIAA are subject to TIAA's claims-paying ability.

Please note where a portion of an interest in a retirement plan is distributed in the form of annuity payments, and the annuity payments exceed the amount that would be required to be distributed under the individual account rules based on the value of the annuity, the excess annuity payment amount for a year could be applied towards the RMD for the year with respect to any remaining interest in the same retirement plan or IRA. Such payments will not count toward satisfying the calculated RMD for any plan or contract.

What if I’m still working?

For your current employer's plan: If the plan allows, you may be permitted to delay taking RMDs from your current employer's plan until April 1 after the year you retire.

For other tax-deferred retirement accounts and IRAs (other than Roth): You're required to withdraw a certain amount each year after you reach your required beginning date. It can get complicated, so we suggest discussing the specifics of your situation with your tax advisor. For questions about TIAA retirement accounts originating from prior employers, call 800-842-2252.

Are beneficiaries required to take an RMD?

Generally, yes. Beneficiaries may be required to take an annual RMD. RMD rules for beneficiaries require most non-spousal beneficiaries to receive the balance of their inherited accounts by the end of the tenth year following the account holder’s death. If the Participant died after being required to take RMDs ("after the required beginning date"), then annual RMDs would be required during the ten year distribution period. If a participant dies on or after the required beginning date with a designated beneficiary other than an eligible designated beneficiary, both the 10-year rule and the “at least as rapidly rule” apply. If an participant dies on or after the required beginning date with an eligible designated beneficiary, the 10-year rule does not apply. Thus, distributions must continue annually during the 10-year period. If a participant dies before the required beginning date, all designated beneficiaries are allowed to delay distributions for 10 years. Surviving spouses that are the sole beneficiary can make a one-time election to have their required minimum distributions calculated based on the Uniform Life Table instead of the Single Life Table. If no election is made, the calculation will be based on the Uniform Life Table. You can call TIAA at 800-842-2252 for more information.

What if I already took a withdrawal?

Any withdrawal paid to you in the year you are required to take an RMD will count toward the RMD for the tax-deferred retirement account. In certain situations, you may elect to take your full RMD amount from one or more traditional IRAs instead of separately from each of your traditional IRAs. This is called aggregation, and the IRS also permits it for 403(b) plans. For a 403(b) retirement plan, the RMD is calculated separately but may be withdrawn from any of your 403(b) plan accounts subject to plan rules. The same rule applies to your traditional IRAs. Money withdrawn from a traditional IRA will not count toward your 403(b) plan RMD and vice versa. Money withdrawn from other types of retirement accounts will only count toward the RMD for that tax-deferred retirement account, and no amounts withdrawn from elsewhere will count toward that plan's RMD. If you are not sure whether the withdrawal you received is enough to cover your RMD requirement, call us at 800-842-2252.

What happens if I roll over a Transfer Payout or fixed annuity under 10 years?

A rollover or transfer increases the balance in the accumulation annuity to which it is applied and may result in a larger calculated RMD for that contract when you reach RMD age. However, a rollover or transfer between plans from your TPA contract or fixed period annuity is not allowed on or after January 1 of the year in which you turn age 73.

After that date, except for internal transfers within the same plan (which reduce the balance in one investment and increase the balance in another one, leaving the overall plan investment unchanged), TPA and fixed period annuity payments must be taken in cash.

TPA payments, like other fixed annuity payments, satisfy the RMD for the amount settled into that contract. In addition, for TPA or fixed period annuity payments that exceed the amount that would be required to be distributed under the individual account rules based on the value of the annuity, the excess annuity payment amount for a year could be applied towards the RMD for the year with respect to any remaining interest in the same retirement plan or IRA.

Any excess annuity payment could also be applied to other IRAs and 403(b) contracts using aggregation rules for those contracts.

If you have any questions or want to learn about other ways to satisfy the IRS required minimum distribution rules from your TPA, please call us at 800-842-2252. We're here on weekdays from 8 a.m. to 10 p.m. (ET).

How can I maximize my RMD?

RMDs can help improve your short-term and long-term financial health. Here are some ideas and tools that may help.

Use your RMD to jump start your savings goals

If interested in saving your RMD, putting it into high-yield savings products, such as a CD or Money Market account, may be a viable option. Consider using your RMD to fund your day-to-day financial needs.

What are some of the reasons you should consider banking your RMD?

• Offers easily accessible liquid assets
• Cash on hand gives you the benefit of not dipping into your long-term investments
• Quickly sets up savings for a vacation, home improvement, and other projects you have been considering
• Allows you to pay off debts, relieving you of that burden
• Reduces stress, providing a sense of freedom and flexibility knowing you have the cash from your RMD in a bank
• Saving money can be advantageous because it provides people the opportunity to earn interest while keeping their money safe, providing some peace of mind
• It acts as a safety net
• Gives you the option to put it into an emergency fund for unanticipated expense

Use our budgeting worksheet.

Map out your retirement expenses and see what your income needs may be.

Consider lifetime income options for creating income you can’t outlive.²

These options can help fulfill your RMD requirements while providing income that won’t run out.² Contact us to create an income plan for safe spending in retirement.