Required Minimum Distribution (RMD) Reminder
We would like to take this opportunity to remind you about your annual Required Minimum Distribution (RMD). As you may know, the Internal Revenue Service (IRS) requires that you take an annual distribution from your retirement accounts starting with the year in which you turn 72 years old and every year thereafter.
Annual deadlines
- If you are turning 72 this year: This is the first year you have to take an RMD. Pursuant to IRS regulations, you can either withdraw your distribution by December 31, or choose to defer until April 1.
- The choice to defer is only permitted for tax year you turn 72 in, the year of your first RMD. Moving forward, all annual RMDs will need to be taken by December 31 of each year. (For example, if you choose to defer your 2022 RMD until April 1, 2023, you will still need to withdraw your 2023 annual RMD by December 31, 2023)
- If you turned 72 before this year: You will need to withdraw your RMD by December 31, (even if you deferred your first-year RMD until April).
Note: If this retirement account is a Qualified Retirement Plan (QRP), such as 401k, TSP, 403b, etc., and you are still actively employed, you may be able to delay taking your RMD for this year. Please contact your plan administrator for more details.
- Any Qualified Charitable Distribution provisions claimed for this tax year also reduce your December 31 year end value in calculating your 2023 next years RMD.
Failure to withdraw your distribution by your required deadline (see above) may result in a 50% penalty on the required amount that was not distributed, as required by the applicable IRS regulations.
We suggest that you seek the advice of your Advisor or a tax-planning professional to discuss your calculation and the tax implications of any distribution.
If you have any questions, please don’t hesitate to reach out to MainStreet Team.
