RMD (Required Minimum Distribution)

The yearly minimum the IRS forces you to withdraw from a Traditional Solo 401(k) once you turn 73 (75 if you were born in 1960 or later, SECURE 2.0 staircase). Calculated as the prior year-end balance divided by an IRS life-expectancy factor (around 26.5 at age 73). Skip the RMD and the penalty is 25% of the missed amount, dropped to 10% if corrected within two years. Roth Solo 401(k) accounts are exempt from RMDs starting in 2024 (another SECURE 2.0 change), so a Roth-only Solo 401(k) lets you keep compounding tax-free forever, useful for estate planning.