Retirees: Time to Claim Your Hard-Earned Retirement Income—IRS Sets April 1 Deadline

Retirees turning 73 in 2024 are reminded by the IRS that it’s time to start collecting their well-deserved retirement savings.

For many, this will be the first Required Minimum Distribution (RMD) from IRAs or workplace retirement plans like 401(k)s and 403(b)s.

This marks a crucial milestone — turning your retirement savings into a steady source of income.

 

When Does It Happen?

• The first RMD must be taken by April 1, 2025.
• After the first year, RMDs are due every December 31.
• If you delay your first withdrawal to April, you must withdraw two RMDs in 2025, potentially increasing your tax bill.

If you’re unsure about what assistance you qualify for, take a look here.

 

Who Needs to Take an RMD?

If you own or are a participant in any of these accounts:

• Traditional IRAs
• SEP IRAs
• SIMPLE IRAs
• 401(k), 403(b), and 457(b) workplace retirement plans

Roth IRAs are not subject to RMDs.

 

What Retirees Should Do Now?

• Check your eligibility: If you were born in 1951 (turning 73 in 2024), this applies to you.
• Review your balances: Your financial institution can calculate your RMD or guide you.
• Understand the tax impact: RMDs are taxable and reported as income on your tax return.

 

Exceptions for Some Still-Working Retirees

• If your workplace plan allows, you may delay RMDs if you’re still employed.
• Owners of 5% or more of a business cannot delay.
• SEP and SIMPLE IRAs do not qualify for this delay.

 

Why It’s Important for Retirees?

1. Provides an essential income stream during retirement
2. Helps retirees plan for taxes and expenses
3. Prevents costly penalties — failure to withdraw can trigger up to a 25% penalty for the missed amount

For detailed guidance, check IRS Publication 575 or consult your financial advisor to plan your withdrawals efficiently.

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