Retirees Who Turned 73 in 2024 Must Start Required Withdrawals by April 1
The IRS reminds retirees that those who turned 73 in 2024 must begin required minimum distributions (RMDs) from IRAs, 401(k)s, and similar retirement plans by April 1, 2025, to avoid potential penalties. While RMDs are typically due by December 31 each year, first-time recipients can delay their initial withdrawal until April 1, but this means they will have to take two taxable distributions in 2025—one for 2024 and another for 2025—potentially increasing their tax liability. RMD rules apply to traditional, SEP, and SIMPLE IRAs, as well as 401(k), 403(b), and 457(b) plans, but Roth IRAs are exempt. Employers may allow some workplace retirement plan participants to defer RMDs beyond age 73, but this exception does not apply to 5% business owners or those in SEP and SIMPLE IRA plans. Failure to take RMDs on time can result in significant tax penalties, making it crucial for retirees to plan accordingly.
If you would like to read more, please visit: