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Required Minimum Distribution

Required Minimum Distribution

December 18, 2023

It is that time of year when the Internal Revenue Service requires you to take your required minimum distributions from qualified employer retirement plans and IRAs. Please check with your accountant or financial advisor if you need to take the required distribution.

The required minimum distribution (RMD) for a given year is typically based on your age and the balance of your retirement accounts as of December 31 of the previous year. So, if you need to take your RMD for 2023, you will calculate it based on your account balances as of December 31, 2022. The deadline for handling your RMD for the year is usually December 31 of that year.

According to the RMD rules, you can withdraw your Required Minimum Distributions (RMDs) from any of your retirement accounts. These accounts include Traditional IRAs, 401(k) plans, 403(b) plans, 457(b) plans, SEP IRAs, and SIMPLE IRAs. You can withdraw the total RMD amount from a single account or distribute it proportionally across multiple accounts as long as you meet the IRS requirements for each type of account.

The SECURE Act 2.0 has changed the Required Minimum Distribution (RMD) rules. The new law applies to plans starting after December 31, 2022. RMDs will now begin to go beyond the age of 72 on a gradual basis. Here is how it will work:

- For those who turn 72 after December 31, 2022, and before January 1, 2033, the RMD age will be 73.

- For those who turn 74 after December 31, 2032, the RMD age will be 75.

Another change in the Secure Act 2.0 pertains to inherited IRAs. A PDF is attached below to determine which distribution rules apply.

CAN I DELAY DISTRIBUTIONS FROM THE TRADITIONAL IRA I INHERITED?

Again, if you have any questions regarding the requirements for these distributions, please do not hesitate to call our office.