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October 9, 2014

Year-End Reminder: Required Minimum Distributions Due by Year-end


By Denise Appleby


  • The SECURE Act extended the first RMD age to 72, for those who reach age 70 1/2 after December 31, 2019. As a result, the required beginning date for such individuals is April 1 of the year that follows the year in which they reach age 72.

The RBD can be deferred past age 72 until retirement for employer sponsored retirement plans.


If you are at least age 70½ by the end of this year, you must take a required minimum distribution (RMD) from your IRA for the year. Generally, your RMD must be withdrawn by the end of the calendar year. However, if you just reach age 70½ this year, your RMD for this year can be deferred until April 1 of next year.

Consideration on Deferring RMD

If you reach age 70½ this year and choose to defer your RMD until next year, you will need to take two RMDs by the end of next year, as your RMD for next year must be withdrawn by the end of next year.  Withdrawing two RMD amounts in one year could put your income into a higher tax bracket, which could result in you owing more income tax to the IRS. 

However, if your income might be low for next year and you have a higher income for this year, it could make good tax sense to defer this year’s RMD unto next year.

In order to get a reasonable estimate of how deferring your RMD could affect you from an income tax perspective, have your tax preparer perform an income tax projection for both options.

If you fail to withdraw your RMD by the deadline, you will owe the IRS an excess accumulation penalty of 50% of the shortfall.

The RMD rules apply to traditional IRAs, SEP IRAs and SIMPLE IRAs. They do not apply to Roth IRA owners. 

Please contact your financial advisor with questions about your RMD

 Originally published November 2012.



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