Table of Contents
Share this article
Valor Tax Relief Team
Retirement & Tax Planning Specialists
Understanding RMD Requirements
Required Minimum Distributions (RMDs) generally begin at age 73 for most tax‑deferred retirement accounts. Withdrawals are taxable as ordinary income (except previously taxed amounts). Roth IRAs have no lifetime RMDs for owners, but beneficiaries of inherited Roths do have distribution rules.
Accounts Subject to RMDs
- • Traditional, SEP, and SIMPLE IRAs
- • 401(k), 403(b), 457(b), and profit‑sharing plans
Calculating Your RMD
Use prior year‑end balance ÷ life‑expectancy factor (IRS tables). IRAs can be aggregated; workplace plans typically must distribute separately.
Key Timing Rules
- • First RMD: by April 1 of the year after turning 73 (consider taking in the same year to avoid doubling up)
- • Subsequent RMDs: by December 31 each year
- • Still working? Some plans allow delay until retirement—check your plan document
Penalties for Missing an RMD
Excise Tax
A 25% excise tax applies to the shortfall. If corrected promptly, it may be reduced to 10% when filing Form 5329 with a waiver request.
Missing RMDs can also raise future taxable income, impact Social Security taxation, and increase Medicare premiums (IRMAA) in later years.
How to Fix a Missed RMD (Step‑by‑Step)
- Confirm the missed amount using statements and IRS tables.
- Take the distribution immediately (note it as prior‑year RMD if applicable).
- File Form 5329 to compute the excise tax and request a waiver for reasonable cause.
- Adjust withholding or estimated taxes to prevent underpayment penalties.
Need help choosing the best path? Explore Penalty Abatement and services.
Inherited Accounts: Special Rules
10‑Year / 5‑Year Rules
Many non‑spouse beneficiaries must empty the account within 10 years (or 5 in some cases). Required annual RMDs may still apply depending on facts.
Life‑Expectancy Method
Eligible designated beneficiaries may use life‑expectancy tables. Missing an inherited RMD can trigger the same excise tax.
Prevention & Planning Tips
Automate
Set up automatic withdrawals and reminders with your custodian.
Coordinate
Align RMD timing with other income to manage brackets and IRMAA.
Review Annually
Recheck balances and factors each January; confirm SSA‑1099s and withholdings.
Missed an RMD? We Can Help Fix It Fast.
We’ll guide your correction, minimize penalties, and build a plan to stay compliant.
Get Your Free Consultation