Required Minimum Distribution (RMD) Updates
February 22, 2024
As we’ve discussed previously, laws and limits affecting all areas of financial planning tend to change with each passing year. One item that is always in flux is your required minimum distribution (RMD) out of retirement accounts. RMDs constitute the minimum amount you must withdraw from your retirement accounts over the course of the year to satisfy federal tax rules. They will vary depending on your account balance and an annually revised Uniform Life Table devised by the Internal Revenue Service.
Owing to a positive 2023 in many markets, it is likely that your RMD might be increasing in 2024. It is important to stay up to date on these movements. Failure to meet RMD requirements can result in a financial penalty and RMDs are taxable income that must be reported.
Beginning in 2023, the SECURE 2.0 Act raised the age that you must begin taking RMDs to age 73. If you reach age 73 in 2024, the required beginning date for your first RMD is April 1, 2025, for 2024. For those already subject to RMDs, the established deadline continues to be Dec. 31.1
There are many options available for managing RMDs and helping to mitigate your potential tax liability. Seek the help and guidance of professionals to help you navigate those differing options and constantly moving requirements. This counsel can provide you with fewer questions and more confidence with your financial planning. Contact us and schedule a consultation to learn about ways you can better manage your distributions this year.