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Published: March 10, 2025
Understanding when to take your Required Minimum Distribution (RMD) is crucial for staying compliant with IRS rules and avoiding hefty penalties. Missing an RMD deadline can result in unnecessary tax burdens, but with proper planning, you can ensure timely withdrawals and minimize your tax liability.
Key Takeaways
- RMDs must be taken by April 1 of the year after reaching your required RMD age.
- Delaying your first RMD can result in two distributions in one tax year.
- RMDs must be completed by December 31 each subsequent year.
- Failing to withdraw the required amount results in a penalty of 25% (or 10% if corrected in time).
- IRS penalty relief is available under certain conditions.
RMD Deadlines: When to Take Your First and Subsequent RMDs
The First RMD Deadline
The timing of your first RMD depends on when you reach your required RMD age. If you turn:
- 73 in 2024 or later, your first RMD must be taken by April 1 of the following year.
- 75 in 2033 or later (for those born in 1960 or after), your first RMD will follow the same rule.
For example, if you turn 73 in July 2025, you can take your first RMD anytime in 2025, but you have the option to delay it until April 1, 2026. However, if you delay, you’ll also need to take your second RMD by December 31, 2026, which could increase your taxable income for that year.
Ongoing RMD Deadlines
After your first RMD, all future RMDs must be taken by December 31 each year. Unlike the first RMD, there is no option to delay subsequent withdrawals.
If you have multiple retirement accounts, make sure to calculate and withdraw the correct amount from each account type. While IRA RMDs can be aggregated and withdrawn from any IRA, 401(k) and 403(b) RMDs must be taken separately from each account.
Consequences for Missing Deadlines
Failing to take an RMD results in an IRS penalty known as the excise tax:
- 25% penalty—If you fail to take the full RMD amount, the IRS imposes a penalty equal to 25% of the shortfall.
- 10% penalty (Correction Window ↗)—If you correct the mistake by withdrawing the missed RMD and filing IRS Form 5329 ↗ before the end of the second tax year after the missed RMD, the penalty is reduced to 10%.
For example, if you were required to withdraw $10,000 but missed it, the penalty would be $2,500 (25%). If you correct it within the allowed time, the penalty drops to $1,000 (10%).
How to Request Penalty Relief
If you missed an RMD due to reasonable error, you can request a waiver of the penalty by filing IRS Form 5329 and attaching a letter explaining:
- The reason for the missed RMD.
- The corrective action you took (such as withdrawing the missed amount immediately).
- Steps you will take to prevent future missed RMDs.
The IRS has the discretion to waive the penalty if they find the explanation reasonable.
Avoiding RMD Pitfalls
To ensure you never miss an RMD deadline:
- Set Calendar Reminders:—Mark December 31 as your annual RMD deadline.
- Automate Withdrawals—Many financial institutions allow you to set up automatic RMD withdrawals.
- Consult a Tax Advisor—If you have multiple accounts or inherited IRAs, a tax professional can help with complex rules.
By understanding the RMD deadlines and planning accordingly, you can avoid costly penalties and manage your retirement distributions efficiently.
Next: The Tax Impact of Required Minimum Distributions (RMDs)
Taking your RMD on time is important, but understanding its tax impact is just as crucial. Since RMDs count as taxable income, they can push you into a higher tax bracket or increase your Medicare premiums. In the next section, we’ll explore how RMDs affect your taxes—and smart strategies to reduce your tax burden.
Read Next: The Tax Impact of Required Minimum Distributions (RMDs) ➡