Hello everyone,
The IRS has published some new rules if you turned 73 in 2024. Below is an excerpt from a recent IRS publication. You may click on the hyperlink at the bottom of the page to read the full transcript.
Required minimum distributions (RMDs) are the minimum amounts you must withdraw from your retirement accounts each year. You generally must start taking withdrawals from your traditional IRA, SEP IRA, SIMPLE IRA, and retirement plan accounts when you reach age 73.
Participants in a workplace retirement plan (for example, 401(k) or profit-sharing plan) can delay taking their RMDs until the year they retire, unless they’re a 5% owner of the business sponsoring the plan.
- You can withdraw more than the minimum required amount.
- Your withdrawals are included in taxable income except for any part that was already taxed (your basis) or that can be received tax-free (such as qualified distributions from designated Roth accounts).
Withdrawals from Roth IRAs and Designated Roth accounts (401(k) or 403(b)) are not required until after the death of the account owner. However, beneficiaries of Roth IRAs and Designated Roth accounts are subject to RMD rules.
If you reach age 73 in 2024:
- Your first RMD is due by April 1, 2025, based on your account balance on December 31, 2023, and
- Your second RMD is due by December 31, 2025, based on your account balance on December 31, 2024.
For defined contribution plan participants or IRA owners who die after December 31, 2019, (with a delayed effective date for certain collectively bargained plans), the entire balance of the deceased participant’s account must be distributed within ten years. There’s an exception for a surviving spouse, a child who has not reached the age of majority, a disabled or chronically ill person, or a person not more than ten years younger than the employee or IRA account owner.
The new 10-year rule applies regardless of whether the participant dies before, on, or after the required beginning date. The required beginning date is the date an account owner must make take their first RMD.
For more information on IRAs, including required withdrawals and beneficiaries, see:
https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs