Required Minimum Distribution
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It's the minimum amount that account holders of tax-deferred retirement accounts (like a 401(k) or traditional IRA) must withdraw each year starting at a legally mandated age, calculated by dividing the prior year-end account balance by a life-expectancy divisor from an IRS table. It exists to ensure tax-deferred savings eventually get taxed rather than being passed on indefinitely.

The divisor comes from an IRS life-expectancy table (commonly the Uniform Lifetime Table) based on your age each year; as you get older the divisor gets smaller, which means the required percentage of your balance you must withdraw actually increases each year, even if your balance stays flat.

Yes — for traditional (pre-tax) retirement accounts, RMD withdrawals are taxed as ordinary income in the year received; Roth IRAs are generally exempt from RMDs during the original owner's lifetime, since Roth contributions were already taxed.

Missing or under-withdrawing an RMD can trigger a significant penalty (historically up to 50%, though reduced in some jurisdictions' recent rule changes to a lower percentage if corrected promptly) on the shortfall amount, so it's one of the least forgiving deadlines in retirement account rules.

Yes — the RMD is a minimum, not a cap; you can withdraw more if you need the funds, though doing so increases your taxable income for that year and reduces the balance still growing tax-deferred, so many retirees withdraw just the minimum unless they have a specific reason to take more.