Retirement funds cannot be kept in your account for an unlimited amount of time. You will need to start taking withdrawals from your IRA, SIMPLE IRA, SEP IRA, or retirement plan account once you reach a certain age.
If you turned 70½ prior to January 2020, your RMD withdrawals should start once you reach age 70½. Due to changes made by the Setting Every Community Up for Retirement Enhancement (SECURE) Act, if your 70th birthday is July 1, 2019 or later, you do not have to take withdrawals until you reach age 72.
Roth IRAs do not require any withdrawals until after the death of the owner.
What is the beginning date for my first RMD?
IRAs (including SEPs and SIMPLE IRAs):
- April 1 of the year following the calendar year in which you reach age 70½ if you were born before July 1, 1949. You reach age 70½ on the date that is 6 calendar months after your 70th birthday.
- April 1 of the year following the calendar year in which you reach age 72 if you were born after Jun 30, 1949.
401(k), profit-sharing, 403(b), or other defined contribution plan Generally, April 1 following the later of the calendar year in which you:
- reach age 72 (age 70½ if born before July 1, 1949), or
- retire (if your plan allows this). You can view this comparison chart for additional information regarding different types of plans.
What date do I need to take my RMD after the first distribution?
Every year after your first required beginning date, you will need to withdraw your RMD by December 31.
For the first year following the year you reach age 70½ (age 72 if born after June 30, 1949), you will generally have two required distribution dates: an April 1 withdrawal (for the year you turn 70½ (or 72 if born after June 30, 1949)) and an additional withdrawal by December 31 (for the year following the year you turn 70½ (or 72 if born after June 30, 1949)).
You can make your first withdrawal by December 31 of the year you turn 70½ (or 72 if born after June 30, 1949) instead of waiting until April 1 of the following year which would allow the distributions to be included in your income in separate tax years.
What happens if I don’t take my RMD on time?
If you fail to take your full RMD on time, the amount not withdrawn is taxed at 50%. You must file form 5329 on your federal tax return for the year that the full RMD was not taken.
The IRS can waive part or all of this tax if you can show that any shortfall in the amount of distributions was due to reasonable error and you are taking reasonable steps to remedy the shortfall. In order to request a waiver of the penalty for late withdrawal or your RMD you should complete form 5329 and enter your reason for requesting a waiver