Most retirees must take required minimum distributions by Dec. 31

Local News

WASHINGTON, D.C. — On Wednesday, the Internal Revenue Service (IRS) reminded retirement plan participants and individual retirement account owners that payments, called required minimum distributions, must usually be taken out by Dec. 31.

Required minimum distributions (RMDs) generally are minimum amounts that retirement plan account owners must withdraw annually, starting with the year they reach 72 or the year they retire if it is beyond then.

However, if the retirement plan account is an IRA or the account owner is a 5 percent owner of the business sponsoring the retirement plan, the RMDs must begin once the account holder is age 72. This is still the case if they’re still working. RMD amounts not withdrawn from accounts on time may be subject to penalties.

Individuals who reached 70-and-a-half in 2019, (70th birthday was June 30, 2019 or earlier) did not have an RMD due for 2020, but will have to take one by Dec. 31, 2021.

Individuals who reach 72 in 2021 (and their 70th birthday was July 1, 2019 or later) have their first RMD due by April 1, 2022.

The required distribution rules apply to:

  • Owners of traditional Individual Retirement Arrangements (IRAs)
  • Owners of traditional Simplified Employee Pension (SEP) IRAs
  • Owners of Savings Incentive Match Plans for Employees (SIMPLE) IRAs
  • Participants in various workplace retirement plans, including 401(k), Roth 401(k), 403(b) and 457(b) plans

Roth IRAs do not require distributions while the original owner is alive.

Taxpayers can find frequently asked questions, forms and instructions and easy-to-use tools HERE.

For news delivered right to yousubscribe to JET 24/FOX 66/YourErie.com’s breaking, daily news & severe weather email lists.

Copyright 2022 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Don't Miss

More News