Retirees: IRS Confirms April 1 Deadline for Required Retirement Plan Payments

The IRS has issued an important reminder for retirees: If you turn 73 in 2024, you must start collecting your Required Minimum Distributions (RMDs) from your retirement savings plans by April 1, 2025.

This ensures retirees begin receiving the benefits they've earned from years of saving.
 

Who Needs to Take Action?

The rule applies to retirees with the following accounts:

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

Note: Roth IRAs are exempt from RMDs while the account holder is alive.
 

Why You Should Note April 1st?

• If you turn 73 in 2024, this is your first mandatory RMD deadline.
• After the first year, annual RMDs must be withdrawn by December 31 each year.
• If you delay the first withdrawal until April 1, you’ll need to take your 2025 RMD before December 31, 2025, meaning two RMDs in one year — potentially increasing your taxable income.

What Retirees Should Know?

• Your retirement plan provider or IRA trustee should calculate your RMD amount or provide guidance.
• The amount due is usually reported on Form 5498.
• RMDs are taxable income and must be included on your tax return.

Possible Exceptions

Some workplace plan participants might defer their RMD if:

• They’re still working and
• Their plan allows postponement (excludes business owners with over 5% ownership).

However, SEP and SIMPLE IRAs require RMDs without deferral, and Roth IRAs do not require RMDs.

Why This Matters for Retirees

Missing your RMD deadline can result in significant penalties — up to 25% of the amount not withdrawn. Ensuring timely withdrawal helps retirees:

• Access the income they’ve saved for
• Avoid penalties
• Plan better for taxes and future financial needs

For more detailed guidance, retirees can review IRS Publication 575 or speak with their financial advisor.

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