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Required Withdrawals from Your Accounts

April 25, 2023

You have an important financial milestone coming up! The year in which you turn 73 is deemed by the IRS your “first distribution year.” This means you must start taking required minimum distributions (RMDs) from any qualified retirement accounts you hold, including IRAs, 401(k)s, 403(b)s, profit-sharing plans, and other defined contribution plans.

Your annual “required minimum distributions” are calculated based on your retirement account balances and life expectancy. You may withdraw more than the RMD from these accounts, but not less. The important deadline to remember is that you must take your first RMD by April 1 of the year following your 73nd birthday. If you don’t, you’ll face a 50% excise tax on the amount not distributed.

Subsequent RMDs are due by year-end of each year. Note that postponing the first RMD results in the need to take both the first and second RMDs by December 31 in the same tax year.

RMD requirements can be complex, but the good news is that strategies exist for managing them more easily, so you don’t miss a deadline. Let’s meet to discuss your options and help ensure you understand the next steps required to avoid deadlines and penalties. Simply call the office to set up a time.

This communication is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to be used in lieu specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.