Turning 73 in 2024? Here’s What the IRS Needs You to Know About RMD Deadlines
- Author: Elizabeth Miller
- Posted: 2024-12-18
If you’re 73 or turning 73 in 2024, it’s time to focus on your Required Minimum Distributions (RMDs).
These are mandatory withdrawals from certain retirement accounts like traditional IRAs and 401(k)s.
Missing the deadline could result in hefty penalties, so it’s essential to understand the rules and take action.
What Are RMDs?
RMDs are annual withdrawals required from tax-deferred retirement accounts starting at age 73 (raised from 72 under the SECURE 2.0 Act).
These withdrawals are taxable income and prevent funds from being sheltered indefinitely.
- If you turned 73 this year, your first RMD is due by April 1, 2025.
- Subsequent RMDs must be taken by December 31 each year.
SECURE 2.0 Changes
- RMD Age Raised to 73: This gives account holders more time to grow their savings tax-deferred.
- No RMDs for Roth 401(k)s and 403(b)s: Starting in 2024, RMDs are no longer required for Roth accounts in workplace plans during the owner’s lifetime.
RMD Rules by Account Type
- Traditional IRAs:
- RMDs are required at 73.
- You can withdraw the total RMD from one or multiple IRA accounts.
- Roth IRAs:
- No RMDs are required during your lifetime.
- Inherited Roth IRAs, however, are subject to RMD rules.
- 401(k)s and 403(b)s:
- RMDs apply unless you’re still working and own less than 5% of the business.
Penalties for Missing RMDs
Missing an RMD results in a 25% excise tax on the amount not withdrawn.
This can drop to 10% if corrected within two years.
File IRS Form 5329 with your tax return to report any missed RMDs.
Tips to Stay on Track
- Calculate Your RMD: Use the IRS RMD Worksheet or ask your financial advisor.
- Plan for Taxes: RMDs count as taxable income, so include them in your tax planning.
- Get Help: Work with your IRA trustee or plan administrator to avoid mistakes.
Don’t let the RMD deadline catch you off guard.
Visit IRS.gov for tools and guidance, and consult a financial professional to ensure you’re on track.
Staying proactive helps you avoid penalties and maximize your savings.
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