Congress has made a number of changes to retirement accounts in recent years. For Individual Retirement (IRA) account holders it’s important to understand the new rules surrounding Required Minimum Distributions. RMDs are required by the IRS, and failure to take RMDs will lead to penalties. They are not optional. RMDs apply to IRAs, 401ks, and 403bs. Roth IRA accounts do not require the owners to take RMDs, but upon death RMDs in Roth IRAs are required to be taken by the beneficiaries.
When Do RMDs start?
IRA holders are required to start taking RMDs by April 1st of the year after you turn 73. For every year thereafter you must take it by Dec. 31. The RMD age was changed to 73 in 2023 and is set to move to 75 in 2033.
Depending when you were born, you may have already started taking RMDs based on the former age guidelines. To clarify your RMD age requirement, see the below chart:
| Born Before July 1, 1949 | RMDs started at age 70 1/2 |
| Born July 1, 1949 to December 31, 1950 | RMD age is 72 |
| Born January 1, 1951 to December 31, 1959 | RMD age is 73 |
| Born after January 1, 1960 | RMD age is 75 |
What is my RMD amount?
Your RMD will change annually. The factors that determine your RMD are your age and account balance. You can help determine your RMD by checking this IRA RMD link (https://www.irs.gov/retirement-plans/plan-participant-employee/required-minimum-distribution-worksheets). The credit union has made this process easier as members can check what their RMD is by logging into online banking and clicking the IRA Details tab to find out what their RMD is for the year.
What to do if I have more than one IRA?
Some members have more than one IRA. If so you must calculate the RMD for each IRA, but you can satisfy the RMD requirement by taking the full RMD from just one IRA, or multiple IRAs. As long as the full amount due across all IRAs is taken, the RMD requirement is satisfied.
Inherited IRAs Became More Complicated
The rules around inherited IRAs have changed dramatically and the credit union always recommends members in this situation seek tax advice. In general, for non-spouse beneficiaries the inherited IRA must be exhausted in 10 years. This is a significant change from the prior rule where there was no timeframe. Again, we recommend members in this scenario consult a tax consultant as some scenarios vary.
Can I take my RMD and Keep it in My IRA?
No, you cannot put your RMD in any tax deferred account. You can keep it in a regular savings or checking account, invest it, spend it, etc., but it cannot be in a tax deferred account.
