The Basics of RMDs


By Mike Kura, RFP

WHAT ARE RMDS? – A required minimum distribution (RMD) is the minimum amount of money that must be withdrawn from certain retirement savings accounts each year after a specific age. Typically, these distributions are subject to income tax.

WHO DO RMDS APPLY TO? – RMDs most commonly apply to the following types of retirement savings accounts: Traditional IRA, 401(k), 403(b), 457(b), SEP IRA, SIMPLE IRA, and other defined contribution plans. Roth IRAs are not in this list because the IRS does not require you to take withdrawals from Roth IRAs while you’re alive. Your beneficiaries may have to take RMDs after your passing, however.

WHEN DO YOU BEGIN TAKING RMDS? – Beginning in 2023, the SECURE 2.0 Act raised the age that you must begin taking RMDs to age 73. If you reach age 72 in 2023, the required beginning date for your first RMD is April 1, 2025, for 2024.

If you reach age 73 in 2023, you were 72 in 2022 and subject to the age 72 RMD rule in effect for 2022. If you reach age 72 in 2022,

  • Your first RMD is due by April 1, 2023, based on your account balance on December 31, 2021, and
  • Your second RMD is due by December 31, 2023, based on your account balance on December 31, 2022.
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