Teacher RMD Rules: When 403(b), 457(b) & IRA Distributions Begin

A defined-benefit pension never asks its owner to make a distribution decision. Defined-contribution accounts do - and the Internal Revenue Service eventually makes the decision for you. Required Minimum Distributions exist because pre-tax retirement money has never been taxed, and Congress set an age at which deferral ends and taxable withdrawals must begin.

This article is aimed at educators aged 60 and over holding pre-tax 403(b), governmental 457(b), or traditional IRA balances, and at recently retired teachers meeting an RMD rule for the first time. It explains which accounts RMDs touch, the current age bands, how the amount is determined, the wrinkles that apply specifically to educators, and the penalty for getting it wrong. It does not calculate anyone's RMD and it does not recommend a distribution strategy - both depend on individual facts and belong with a qualified adviser and a tax professional such as a CPA or Enrolled Agent.

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What an RMD is - and which of your accounts it touches

A Required Minimum Distribution is the minimum amount that must be withdrawn each year from certain retirement accounts once the owner reaches the applicable age. For educators, RMD rules touch pre-tax 403(b) accounts, governmental 457(b) accounts, and traditional IRAs. They do not touch the KPERS or PSRS/PEERS pension itself - a defined-benefit pension is already paid as a lifetime income and presents no RMD decision.

The Roth side has changed recently. Roth IRAs have never required lifetime distributions from their owners, and beginning with the 2024 distribution year, designated Roth accounts in 401(k)and 403(b) plans no longer have lifetime RMDs either, under the SECURE 2.0 Act. For Roth balances in a governmental 457(b), SECURE 2.0 addressed them by statute as well, but plan-level treatment is worth confirming with the plan administrator rather than assumed.

The RMD age bands by birth year

The beginning age is no longer a single number - it depends on when you were born. The current bands under the SECURE2.0 Act and the IRS final regulations (TD 10001) are set out below, and one birth year deserves a caution flag of its own.

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The 1959 row is not a typographical oddity. The SECURE 2.0 Act's drafting left 1959 births covered by two provisions at once, and the IRS has proposed - but at the time of writing not finalised - regulations resolving the year at 73. Readers born in 1959 should treat their beginning age as a point to confirm with a tax professional as the guidance settles.

How the amount is determined, and the first-year timingchoice

The annual RMD is the account balance as of December 31 of the prior year divided by a distribution period from the IRS's Uniform Lifetime Table. The calculation is mechanical, and custodians typically report it - the planning content is in the timing. You may always withdraw more than the minimum; distributions are generally taxable as ordinary income, except for any previously-taxed basis or qualified Roth distributions.

The first year carries a one-time choice. The first RMD can be deferred to April 1 of the year after the year you reach your beginning age - for employer plans, April 1 following the later of that year or the year you retire, where the plan's still-working provision applies. Every later year's RMD is due by December 31. The trade-off is that deferring the first RMD stacks two taxable distributions into the second year, which can move a household into a higher bracket. Neither choice is universally better; itis a bracket question for a tax professional.

The educator-specific wrinkles

The still-working exception

Educators teaching past their RMD age can generally delay RMDs from their current employer's plan until the year they retire, provided the plan allows it and they are not a 5% owner - a condition school employees will not meet. The exception never applies to IRAs: traditional IRA RMDs begin at the applicable age even for someone still teaching full-time, and, because the delay is tied to still working for the employer that sponsors the plan, it does not help with old 403(b) accounts left with previous employers.

Aggregation: which balances can be combined

Aggregation rules differ by account type, and educators often hold several types at once. IRA RMDs are calculated per IRA but may be withdrawn from any one or more IRAs. 403(b) contracts follow the same principle among themselves: calculate each, then take the total from any403(b). But RMDs from 401(k) and 457(b) plans must each be taken from their own plan, and there is no combining across account types. A retired teacher with two 403(b)s, a 457(b), and an IRA therefore has three separate RMD obligations to track.

The pre-1987 403(b) grandfather rule

Long-serving educators may hold 403(b) money contributed before 1987. Where the plan has separately accounted for those pre-1987 amounts, they are not subject to the age-73 RMD rules of Internal Revenue Code Section 401(a)(9) and need not be distributed until December 31 of the year the participant turns 75 or, if later, April 1 of the year after the year the participant retires. If records were not kept, the entire balance falls under the ordinary age-73 rules. Whether a decades-old contract actually maintained that separate accounting is a question for the provider - worth asking before assuming either answer.

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The penalty for missing an RMD

The excise tax on a missed or insufficient RMD is 25% of the amount not withdrawn, reduced to 10% if the shortfall is corrected within two years, reported on Form 5329. That is considerably gentler than the prior law's 50%, but it remains one of the sharper penalties in the retirement code - and it is entirely avoidable with a calendar, a current list of accounts, and custodian notifications switched on.

Where RMDs sit in the bigger income picture

An RMD is a floor on withdrawals, not a ceiling and not a strategy. For educators whose pension already covers baseline spending, RMDs can arrive as income the household does not currently need - which is a tax-planning prompt rather than a windfall. The years before the beginning age are the window in which withdrawal sequencing is chosen rather than imposed; that design question is covered in the companion retirement-paycheck article in the related reading.

One concept worth knowing educationally: the Qualified Charitable Distribution (QCD). Owners of traditional IRAs aged 70½ or over can direct distributions to charity — up to $111,000 per person for 2026 - and such distributions count toward the IRA's RMD. QCDs are an IRA-only mechanism: they are not available from 403(b) or 457(b) accounts. Whether a QCD suits any particular household is a question for an adviser and tax professional