Don't Forget to Take Your RMDs Before the End of 2023

The IRS has been a little all over the board when it comes to the rules around required minimum distributions. In fact, they recently released a new draft of the instructions for the 2023 Form 5329 that provides new information about the penalties you can incur if you don't take your RMDs.

So here's a super high-level look at what you need to know:

DO I NEED TO TAKE RMDS?

That's actually fairly simple to figure out.

• If you were born in or before 1950, you have to take RMDs this year.
• If you were born on or after Jan. 1, 1951, you don't have to.

WHAT ACCOUNTS ARE SUBJECT TO RMD RULES?

employer-sponsored retirement plans, e.g., profit-sharing plans, 401(k) plans, 403(b) plans, and 457(b) plans, all fall under RMD rules.

Other tax-deferred retirement accounts — like traditional IRAs, SEPs, and SIMPLE IRAs — are also subject to the rules.

Roth IRA accounts aren't subject to RMD requirements until after the account owner dies. (Also, inherited IRAs have their own set of really complex rules.)

In 2024, RMDs won’t be required for designated Roth 401(k) accounts. But, this year, 2023 RMDs due by April 1, 2024, are still required.

RMDs can cause a lot of confusion, so if you have questions, let us know.