REMINDER Withdraw First RMD by April 1st
As mentioned in our January 21, 2025, WM Wisdom, the starting age for taking required minimum distributions (RMD) remains at 73 for owners of traditional IRAs, 401(k)s, and other workplace retirement plans.
If you turned 73 in 2024, you must take your first RMD by April 1, 2025.
Deadline for Subsequent RMDs
After your first RMD, you must take subsequent RMDs by December 31 of each year, starting with the calendar year that includes your required beginning date.
Example:
If you turn 73 on July 15, 2024, you must take your first RMD for the year 2024 by April 1, 2025. Your second RMD for 2025 must be taken by December 31, 2025, and your third RMD for 2026 must be taken by December 31, 2026.
Do These Rules Apply to My Retirement Plan?
The minimum distribution rules apply to original account holders and their beneficiaries in the following types of plans:
- Traditional IRAs
- SEP IRAs
- SIMPLE IRAs
- 401(k) plans
- 403(b) plans
- 457(b) plans
- Profit-sharing plans
- Other defined contribution plans
- Roth IRA beneficiaries
Delaying RMDs
If you continue to work past the age of 73, you can typically delay taking RMDs from your current employer’s 401(k) plan until you retire.
Penalty for Not Taking RMDs
There is a penalty for failing to take your RMD, although this penalty is lower than in previous years. If the distributions you receive in any year are less than the required minimum distribution, the amount not withdrawn will be subject to a 25% excise tax. This tax reduces to 10% if the issue is corrected within two years.
Should you have questions about this or any other topics related to your personal or business situation, please contact us at any time.
DISCLAIMER: The WM Update, WM Wednesday Wisdom, WM Daily Update and other related communications are intended to provide general information, as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.
