What are your questions about RMDs?
From: REAP, LLC. | Retirement & Estate Advisors & Professionals
You’ve worked hard to save for your retirement. You’ve also carefully built a plan for managing your savings before and after you leave the workforce.
Among other things, this means considering the ins and outs of required minimum distributions (RMDs) for your retirement accounts.
Are you unclear about the rules or any recent changes? Here are some of the most frequently asked questions about RMDs.
Which accounts have RMDs?
RMD rules generally apply to tax-deferred retirement accounts such as traditional IRAs, SEP IRAs, SIMPLE IRAs and most 401(k) plans.
When are RMDs taken?
Your age will determine when you take your first RMD. The IRS states that:
- If you were born before July 1, 1949, you must take an RMD by April 1 of the year after you reach the age of 70 1/2.
- If you are born after June 30, 1949, you have until April 1 of the year after you turn 72.
Once you have taken your first RMD, the IRS requires all following RMDs to be taken annually by December 31.
How are RMDs calculated?
The amount is determined by a number of factors, including your retirement account balance at the end of the previous year and your age.
What about recent changes?
As you may already know, under the coronavirus relief bill, the IRS waived RMDs for 2020. Last month, it was announced that anyone who already took an RMD this year has until August 31 to roll that amount back into their retirement accounts.
If you have more detailed questions about your situation, please reach out today.
We at REAP, LLC. are proud to have helped many families and individuals over the years. Our firm uses a “team approach” to focus on retirement issues, estate planning needs and other various financial challenges. For a FREE consultation:
Call (855) 904-REAP