Essential Tips for Planning Your First Required Minimum Distribution (RMD) if You're Turning 73 in 2024
Sunday, 14 April 2024, 11:46
Understanding RMDs and Avoiding Penalties
It's important to know the rules of RMDs so you can plan accordingly and avoid penalties. The nice thing about saving for retirement in a traditional IRA or 401(k) is getting to enjoy a tax break on the money you contribute. But there's a downside. At some point, the IRS is going to force you to start withdrawing from your retirement plan whether you want to or not.
The New RMD Rules
- If you're turning 73 this year, you'll need to start thinking about your first RMD. Your first RMD is due by April 1 of the year after you turn 73, so in this case, 2025.
- Delving into the details of when and how to withdraw your RMD can help minimize tax implications.
The Importance of Taking Your RMDs
- Failing to take RMDs can result in a 25% penalty on the amount not withdrawn, so careful planning is essential.
- You can reinvest your RMD if you don't need it immediately, avoiding unnecessary tax burdens.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.