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Turning 73 in 2023? Here are your RMD Requirements

January 17, 2023

If you turn 73 this year, you must begin withdrawing from your retirement accounts by April 1, 2023.

If you’re turning 73 in 2023, you’ll want to be aware of your RMD requirements. Due to changes under the Setting Every Community Up for Retirement Enhancement (SECURE) 2.0 Act, if you turn 73 this year, you must begin withdrawing from your retirement accounts by April 1, 2023. Let’s dive into the requirements.

What is an RMD?

Your required minimum distribution is the minimum amount you must withdraw from your account each year. This applies to Individual Retirement Accounts (IRAs), SIMPLE IRAs, and SEP IRAs. Roth IRAs do not require withdrawals until after the death of the account owner.

Some things of note:

  • You can withdraw more than the minimum required amount.
  • Your withdrawals will be included in your taxable income except for any part that was taxed before (your basis) or that can be received tax-free (such as qualified distributions from designated Roth accounts).
  • Qualified charitable donations made directly from your IRA to a qualified charity, up to a maximum of $100,000, will also be excluded from taxable income, provided you are over the age of 70½ .

More about the 73 age requirement

In 2020, the SECURE Act changed the age requirement from 70½ to 72, meaning anyone whose birthday fell on or after July 1, 2019, had until age 72 to take his/her first RMD.

SECURE 2.0, signed December 29, 2022, then raised the 72 age requirement to 73 for 2023. The increase to age 73 is effective as of 1/1/2023.

Unfortunately, if you turn 73 in 2023, that means you turned 72 in 2022 when the RMD age requirement was still age 72. SECURE 2.0 doesn’t apply to you and you must take your RMD for 2022 by April 1, 2023. You then also must take your 2023 RMD by December 31, 2023.

How do you calculate your RMD?

Annually the required minimum distribution is calculated by dividing the IRA balance as of December 31st of the preceding calendar year by the applicable life expectancy factor from the IRS tables. A separate table is used if the sole beneficiary is the owner’s spouse who is ten or more years younger than the account owner. You can find the tables here-

How do I report this?

IRA trustees are required to report the required distribution amount to IRA owners, or to calculate it for the owners on request, by January 31st of the year the distribution is required. However, as the required minimum distribution can be withdrawn from whichever IRA you choose, you are responsible for ensuring the proper amount is timely received. You could be hit with a 25% penalty tax if you don't withdraw the required minimum amounts each year. (That penalty was 50% for tax years before 2023.) It is your responsibility to take the RMD, not the Trustees’. If you have multiple retirement accounts, you need to add them all up to calculate the proper RMD. However, you can select which account(s) you wish to take the money from as long as the total distributions equal or exceed the RMD.

Any other requirements?

Annual distributions are also required to be made from your employer's qualified plan. These include 401(k), 403(b), 457(b) and profit-sharing plans. Generally, the plan administrator is responsible for calculating and timely paying the RMD amount from qualified retirement plans. If you are still working for the employer and do not own more than 5% of the company stock, you can delay your RMD until retirement.

Visit our SECURE Act 2.0 Knowledge Center for more information on retirement changes that could impact you and your business.


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