Failure to take a Required Minimum Distribution (RMD) from a retirement account can result in: a one-time triggered "grace period" in which the RMD must be made up within the next three years in addition to the required distributions for those years. a penalty of 50% of the required distribution not taken. a flat-dollar penalty of $2500 per year in which a required minimum distribution is not taken. no penalty but the account will lose its tax deferred status; any future gains will be taxed as ordinary income