When Are RMDs Due: Understanding the Rules and Deadlines

RMDs, or Required Minimum Distributions, are a crucial aspect of retirement planning. Typically, RMDs are due by April 1st of each year, starting at age 72.

However, if you turned 72 in December or later, your first RMD is actually due by December 31st of the same year.

RMDs are annual distributions you must take from your retirement account(s) when you reach a certain age.

RMDs are mandatory, meaning you can't opt out of taking them. They're required for traditional IRAs, SEP IRAs, and SIMPLE IRAs, but not for Roth IRAs.

The IRS determines the amount of each RMD based on your account balance at the end of the previous year and a life expectancy factor provided by their Uniform Lifetime Table.

RMDs are intended to prevent individuals from deferring taxes on their retirement savings indefinitely.

The IRS requires RMDs to be withdrawn from traditional IRAs, SEP IRAs, and SIMPLE IRAs, but not from Roth IRAs.

For more insights, see: Is Roth 401k Ira Subject to Rmd

Your first RMD must be taken by April 1 of the year after you turn 73. This is known as the Required Beginning Date (RBD).

The due date for your first RMD is April 1 of the year following the year in which you reach RMD age. This is a bit confusing, but essentially, you have a one-year delay on your first RMD.

After your first year, RMDs must be taken annually no later than December 31. This means you'll have to take your RMD by the end of each year, starting the year after your first RMD.

If you delay taking your first RMD until April 1, you must still take your subsequent RMDs by December 31. So, in the example given, if you turn 73 in 2023 but delay taking your 2023 RMD until April 1, 2024, you must still take your 2024 RMD by December 31, 2024.

Here's a quick summary of the due dates:

Exceptions to RMDs are in place to allow for tax-free growth and long-term savings. The most notable exception is for Roth IRAs and Roth 401(k)s, which generally do not have RMDs.

In 2024, Roth IRAs and Roth 401(k)s were exempt from RMDs due to their unique tax structure. This change was made to encourage tax-free growth and allow individuals to invest their money for a longer period.

This exemption is intended to help individuals build up their long-term savings without the need for mandatory withdrawals.

Additional reading: Are There Rmds for Roth Iras

Determining your RMD age is crucial to understanding when you must start taking Required Minimum Distributions (RMDs). Your RMD age is based on the year you were born.

If you were born before July 1, 1949, your RMD age is 70 ½. This is a fixed rule, so if you're in this age group, you know exactly when you'll need to start taking RMDs.

Expand your knowledge: 401k Minimum Distribution If Still Working

If you were born between July 1, 1949, and December 31, 1950, your RMD age is 72. This is also a straightforward rule to follow.

If you were born between January 1, 1951, and December 31, 1958, your RMD age is 73. This is the new default age for RMDs, thanks to changes in the law.

If you were born after December 31, 1958, your RMD age is 75. This is the latest age group for RMDs, and it's essential to plan accordingly.

Here's a quick reference guide to help you determine your RMD age:

Remember, your RMD age determines when you must start taking RMDs, so it's essential to know your age group to plan accordingly.