A Required Minimum Distribution (RMD) is the minimum amount you must withdraw each year from certain retirement accounts once you reach a specific age, as determined by the IRS. This rule applies to accounts like Traditional IRAs and pre-tax 401ks, including Solo 401ks. The government gave you a tax break when you contributed, but eventually, they want to collect taxes when you withdraw. RMD amounts are typically based on your age and the balance in your account. Failing to take them on time can result in significant penalties. Previously, Roth accounts in a Solo 401k were also subject to RMDs, unless rolled into a Roth IRA. However, starting in 2024, Roth Solo 401ks are no longer subject to RMDs during the account holder’s lifetime, so rolling over for this reason is no longer necessary.