If you’re turning 73 in 2024, you’ll want to be aware of your RMD requirements. Due to changes under the Setting Every Community Up for Retirement Enhancement (SECURE) Act and its amendments, if your date of birth falls between January 1, 1951 and December 31, 1951 your first RMD is due by April 1, 2025 at the latest. Let’s dive into your requirements.

What is an RMD?

Your required minimum distribution is the minimum amount you must withdraw from your qualified retirement 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).

More about the 73 age requirement

The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, as amended, changed the rules for retirement and estate planning. One major development was an increase in the age at which people must start taking their RMDs from 70½ to 72.

In December 2022, the SECURE 2.0 Act further increased the required age for RMDs to 73 if you turn 73 between 2023 and 2032. The age is scheduled to climb to 75 in 2033, making it a moving target.

Keep in mind that the required beginning date for RMDs is April 1^st of the calendar year following the year you turn 73.

What if I am turning 73 in 2024?

If your date of birth falls between January 1, 1951 and December 31, 1951, meaning you turn 73 this year, you have as late as April 1, 2025 to take your first RMD.

Many opt to take their first RMD by December 31 of the year they reach 73, because if you wait until April 1 of the following year, you will need to take your second RMD by December 31, 2025—hence, two distributions in one year that you will owe taxes on.

For example, you turn 73 in June of 2024. You may delay your first RMD to April 1, 2025, however, you will need to take a second RMD by 12/31/2025.

The following table helps clarify when you’ll be required to take RMDs from your retirement accounts:

How do you calculate your RMD?

Every year, the RMD from an IRA 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. You can find the tables here- https://www.irs.gov/retirement...

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 amount each year. 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.

Happy Birthday! Don’t forget to take your RMD as you will face substantial penalties for noncompliance.