The Internal Revenue Service (IRS) issued an official reminder this Wednesday: retirees who turn 73 in 2024 must initiate required minimum withdrawals (RMDs) from their traditional IRAs, 401(k) and similar plans before April 1, 2025. The rule, detailed in the release IR-2025-33, seeks to prevent penalties for non-compliance with statutory distributions.
Although RMDs are usually taken annually before December 31, the IRS allows you to postpone the first withdrawal until April 1 of the following year upon reaching age 73. This deferral applies exclusively to people born after December 31, 1950. However, those who use this extension must make two distributions in 2025: one corresponding to 2024 and another to 2025.
Affected plans and notable exclusions, as explained by the IRS
Both withdrawals will be declared in the 2025 income tax. “Failure to comply could generate fines of up to 25% of the undistributed amount,” warns the agency. Exceptions apply to public employees with 403(b) plans prior to 1987 and certain participants in workplace plans who have not yet retired, according to specifications in IRS Publication 575.
The RMD rules impact traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k), 403(b) and 457(b) accounts. The custodians of these accounts must annually report the minimum amount to be withdrawn, visible on Form 5498, Box 12b. Roth IRA funds are exempt from this obligation for the life of the owner.
Active employees in work plans could defer RMDs until April 1 after their retirement, except owners of 5% of a company or participants in SEP/SIMPLE IRA plans. For calculations, the IRS suggests using Table III (Uniform Life) in Publication 590-B, which for a beneficiary age 73 in 2024 establishes a divisor of 26.5 on the balance as of December 31, 2023.
Support resources and tools from the IRS
The IRS has enabled an RMD FAQ section on its portal, along with calculators and worksheets in Publication 590-B. These resources help determine exact amounts, especially in exceptional cases, such as younger spouse beneficiaries by more than a decade, where Table II applies.
Officials of educational institutions and nonprofit organizations with pre-1987 contributions to 403(b) plans should check with their employers for specific details. The agency reiterates that, although custodians can calculate RMDs, the final responsibility lies with the taxpayer. Common mistakes include missing withdrawals or miscalculating the divisor, based on recent audit data.
So don’t forget: April 1 is the deadline for IRA and 401(k) withdrawals. Those who turn 73 in 2024 must start RMDs or face penalties. Employees with old 403(b) plans and owners of 5% of companies have special rules. Consult Publication 575 avoids errors.