If you’re turning 73 in 2024, the IRS has specific rules regarding Required Minimum Distributions (RMDs) from your retirement accounts. Failing to follow these rules could result in penalties, so it’s important to know when and how to withdraw your funds.
Deadline
Typically, RMDs must be taken by December 31 each year. However, for those turning 73 in 2024, the first RMD can be delayed until April 1, 2025. This one-time delay applies only to your first RMD. After that, you must take RMDs by December 31 every year.
Here’s how the deadlines work:
| RMD Year | Deadline |
|---|---|
| First RMD (for 2024) | April 1, 2025 |
| Second RMD (for 2025) | December 31, 2025 |
| Future RMDs | December 31 each year |
If you delay your first RMD until 2025, you’ll have to take two RMDs in that year—one for 2024 and one for 2025. Since these distributions are taxable, this could push you into a higher tax bracket.
Who Must Take RMDs?
RMD rules apply to:
- Traditional IRAs
- Simplified Employee Pension (SEP) IRAs
- Savings Incentive Match Plan for Employees (SIMPLE) IRAs
- 401(k), 403(b), and 457(b) plans
Roth IRAs are not subject to RMDs while the account owner is alive.
Calculating
Your IRA trustee or plan administrator will usually inform you of the RMD amount or provide a calculation. The RMD amount is listed on Form 5498, Box 12b.
- For your first RMD (2024) due April 1, 2025, the amount will be on Form 5498 for 2023 (issued in early 2024).
Can You Defer RMDs?
Some people may be able to delay RMDs beyond age 73:
- If you’re still working and your workplace plan allows it, you may delay RMDs until April 1 of the year after retirement.
- This exception does not apply to business owners with at least a 5% ownership stake or participants in SEP and SIMPLE IRA plans.
Certain employees with pre-1987 403(b) plan balances should check with their employer for specific rules.
Taking RMDs correctly is crucial to avoid IRS penalties and unnecessary taxes. If you’re unsure about your situation, consult a tax professional or financial advisor.
FAQs
What is the RMD age in 2024?
In 2024, retirees must start RMDs at age 73.
Can I delay my first RMD?
Yes, but only until April 1, 2025. Future RMDs are due December 31.
Do Roth IRAs require RMDs?
No, Roth IRAs do not have RMDs while the owner is alive.
What happens if I don’t take an RMD?
Failing to take an RMD results in a 25% penalty on the missed amount.
Can I avoid RMDs if I’m still working?
Possibly, if your workplace plan allows it, but not for IRA accounts.
