Broker Check
Happy 🎂 Birthday (Now Take Your RMD!)

Happy πŸŽ‚ Birthday (Now Take Your RMD!)

October 31, 2023

Happy Birthday!Hitting age 73 is no small feat, and it’s worthy of celebration!! But also please heed this important reminder! At age 73 you will likely need to start taking a Required Minimum Distribution (RMD) from your employer-sponsored retirement plan and/or IRA-based plan(s) each year. An RMD is an annual amount the IRS requires you to withdraw from your retirement accounts – whether you need the money or not.

Since retirement accounts grow tax-deferred, this is how Uncle Sam makes sure he gets a piece of your retirement pie. Take a moment to review the retirement plan and IRA required minimum distributions on the IRS help page. You could be charged a stiff penalty if you don’t take them… so make sure you do!

Here are a few basic RMD reminders to keep in mind: 

  • Accounts Subject to RMDs - RMDs apply to traditional IRAs, SEP IRAs, SIMPLE IRAs, Rollover IRAs, most 401(k) and 403(b) plans, and most small business accounts.
  • RMD Notifications and Amounts - The financial institution that held your retirement account as of December 31 of last year should have notified you of the RMDs due for this year. If they didn’t compute the RMD amounts, they will do so upon your request.

  • April 1 Deadline Extension - Only first-year RMDs can be delayed. If you delay your first RMD until April 1 of the year after you turn 73, you’re then required to take two RMDs that year (April 1 and December 31).
  • Penalties - If you don’t take any distributions by December 31 or make an error on your distributions so it doesn’t fulfill the requirements, you’re subject to a penalty of 50% of the shortfall.

RMDs are complicated, and mistakes come with a hefty price tag, so let’s make sure your affairs are in order and put a plan in place. Contact our office if you have questions!

In the meantime, we wish you a HAPPY Birthday and a wonderful day filled with fun!