Here’s a sneak peek inside our whitepaper, Your Guide to Required Minimum Distributions (RMDs).

What plans do the RMD rules apply to?

Typically, the RMD rules cover traditional IRAs and IRA-based plans, such as SEPs, SARSEPs and SIMPLE-IRAs. They also apply to tax-favored employer-sponsored retirement plans, such as 401(k) plans, 403(b) plans, 457(b) plans, profit sharing plans and defined contribution plans. However, individuals enrolled in a company-sponsored retirement plan have the option to postpone their Required Minimum Distributions (RMDs) until the year of their retirement, unless they hold a 5% or greater ownership stake in the sponsoring business.

What about Roth accounts?

Once you reached the applicable age, you also must take RMDs from designated Roth accounts in employer-sponsored plans for 2023, including those with a required beginning date of April 1, 2024. You may be able to avoid the RMD rules for 2023 for a Roth 401(k), Roth 403(b) or Roth 457 by rolling the funds into a Roth IRA.

Any changes under SECURE 2.0?

Thanks to SECURE 2.0, for 2024 and later years, RMDs will no longer be required from designated Roth accounts.

Roth IRAs set up in your name that have been open for at least five years are exempt from the RMD rules during your lifetime, allowing your account to accumulate money to pass down to your heirs. But if you inherit a Roth IRA, the RMD rules come into play.

Download our whitepaper, Your Guide to Required Minimum Distributions (RMDs) for more information about when you need to start taking RMDs, how much you need to withdraw, penalties for noncompliance and more.

Contact us to take the guesswork out of taking RMDs and for more details on what’s changed under recent legislation. We can help you comply with the rules and minimize any adverse tax consequences.