Here's How Much Retirees Could Be Forced To Withdraw Each Year From A $250,000 401(k)

A 401(k) is designed to help workers save money for retirement while providing valuable tax advantages. With a traditional 401(k), you make these contributions before income taxes are deducted, and the investments inside the account can grow income tax-deferred. However, according to the Internal Revenue Service (IRS), once you reach a certain age, the federal government generally requires you to begin withdrawing some of the money so it can be taxed as income — this is called a required minimum distribution or RMD.

An RMD is the smallest amount an account holder must remove from a tax-deferred retirement account each year. The IRS generally calculates RMD by dividing the account's value at the end of the previous calendar year by a distribution period based on the owner's age. In simple terms, the formula is: previous December 31 account balance ÷ IRS distribution period = annual RMD. The distribution period becomes smaller as the retiree gets older, requiring them to withdraw a progressively larger percentage of their savings. Under 2026 IRS regulations, people born from 1951 through 1958 generally begin RMDs at 73, while those born in 1960 or later start at 75.

If you're a retiree turning 73 in 2026, the calculation would use the 401(k)'s balance on December 31, 2025. If that balance were $250,000, you would divide it by the IRS distribution period of 26.5 for age 73. That produces a 2026 RMD of approximately $9,434, equivalent to about $786 per month or 3.77% of the account. Although you can delay this first RMD until April 1, 2027, doing so could make you pay RMDs twice in a year.

While having $250,000 in your 401(k) might make you wealthier than you think, it doesn't automatically produce an annual RMD of $9,434. The clearest exception, for instance, is a Roth 401(k). Since 2024, original Roth 401(k) owners have not been required to take lifetime RMDs, meaning a $250,000 balance held entirely in that account would have no required minimum distribution. However, if your 401(k) contains both Roth and traditional funds, only the Roth balance is exempt; you must still take RMDs from the traditional portion.

You may also be able to delay an RMD if you are still employed by the company sponsoring the 401(k). The IRS allows eligible workers to postpone withdrawals until retirement if their plan permits it. However, this exception does not apply if you own more than 5% of the business, nor does it cover traditional IRAs or 401(k)s from former employers.

Finally, having a younger spouse as your sole beneficiary could also reduce the required withdrawal. If your spouse is your sole beneficiary and more than 10 years younger, you use the IRS Joint Life and Last Survivor Table. The younger your spouse is, the lower your RMD can be. For example, at 73 with a 50-year-old partner, the IRS table provides a factor of 36.8, reducing the RMD on $250,000 from $9,434 to approximately $6,793 — a whopping 28% reduction.