IRA RMD
I turned 73 this year and read I must receive my first RMD by 4/1/2025, is this correct and what date should I use for the RMD calculation? Also what's the RMD date in subsequent years?
Answers
-
What is the answer to this question and where do I read the answer?
-
Hi,
Your RMD is based on how much is in the IRA. Your Retirement Administrator can help you with that calculation. Or you can use think link to get to the worksheet for an RMD.
-
Hi Jhoyle50,
Yes, you are correct about the April 1, 2025, deadline for your first Required Minimum Distribution (RMD). Here’s a breakdown of how this works and what you should know:
For your first RMD: the distribution must be taken by April 1st 2025 because you turned 73 in 2024. The IRS allows individuals to delay their first RMD until April 1 of the year following the year they turn 73. The calculation date for your first RMD (for the year 2024) is based on the value of all your retirement accounts as of Dec. 31, 2023.For subsequent RMDs: Starting in 2025, and for every year thereafter, your RMD must be taken by December 31 of the respective year. To calculate the RMD for subsequent years; You will use the value of all your retirement accounts as of December 31, of the prior year. For example, when calculating your RMD for 2025, you will use the balance of all your retirement accounts as of December 31, 2024.
Important Note: If you delay your first RMD to April 1, 2025, you will still need to take your 2025 RMD by December 31, 2025. This means you’ll have two RMDs to take in 2025, which could impact your taxable income for that year.
Hope this helps!
-
Your first RMD is applicable in the year you turned 73 so 2024 in this case. You can delay taking this RMD until 4/1/25 as you stated but then will need to take two RMDs in 2025 if you delay. RMDs are calculated based on your account balance on 12/31 of the previous year. Thus, the RMD required in 2024 (which you can withdraw until 4/1/2025) is based on your account balance on 12/31/2023. Your RMD for 2025 will be based on your account balance on 12/31/2024 and must be withdrawn before 12/31/2025. Your brokerage firm or account custodian may have an RMD tool online which will calculate what's owed for what year for you.
-
- There have been some recent changes to the age that you need to take an RMD at. According to the IRS website, "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. Notice 2023-23 PDF permits financial institutions to notify IRA owners no later than April 28, 2023, that no RMD is required for 2023."
It sounds like this situation might apply to you, since you turned 73 this year, and therefore 72 in 2023. Given that it does, you must take your first RMD by Aril 1st, 2025.
2. Here is a great FAQ from our software that may answer your second question:
Generally speaking, a RMD is calculated for each account by dividing the prior December 31 balance of that IRA or retirement plan account by a life expectancy factor that the IRS publishes in Publication 590b . Choose the life expectancy table to use based on your situation found in Appendix A & B.
Therefore, the date used to calculate RMDs is typically the balance as of Dec 31 of the prior year.3. Our software has another great FAQ that answers your third question(It also reinforces the answer to the first question, so sorry about the redundancy here!).
Due to recent changes by congress, if you turned 72 in 2023 you won't have to start taking RMDs until you turn 73 in 2024. The deadline for taking a 2024 RMD is April 1st of 2025. This only applies to taxpayers who turned 72 during 2023 (born in 1951), since the new age for an RMD is 73.
For example:
If you turned 72 in May of 2023 and have a traditional IRA, you'd take your first RMD after your birthday in 2024. You can further delay your first RMD distribution until April 1, 2025. But if you delay your first 2024 RMD to 2025, you'd need to take two RMDs in 2025; the delayed one from 2024 and your regular 2025 RMD. The second must be made by December 31, 2025.
This additional time (April 1st) only applies the first year you need to take the RMD. Every year thereafter the deadline will be December 31st.
Retirement plan and IRA required minimum distributions FAQs | Internal Revenue Service
- There have been some recent changes to the age that you need to take an RMD at. According to the IRS website, "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. Notice 2023-23 PDF permits financial institutions to notify IRA owners no later than April 28, 2023, that no RMD is required for 2023."
-
Hi jholey50,
Thanks for joining in to our live event today!
After your first RMD by April 1, all RMDs must happen by December 31st of the year.
In general you take your first RMD by April 1 of the year after you reach the RMD age. You reached 73 in 2024, so 2025 is the first year your RMD must happen by April 1, 2025. You might want to take the distribution now in 2024. Otherwise, you must take two distributions in 2025 to meet RMD requirements.
Read more here:
You can contact your brokerage where your retirement account is located and they'll be able to calculate the correct RMD in 2025 which is based on several factors.
You may also calculate this on a worksheet if you prefer found in IRS Publication 590-B. However, IRS Publication 590-B has not yet released the 2024 version for use in preparing 2024 tax returns.
