RMD Deadline 2025: A 5-Minute Checklist to Avoid IRS Penalties
For retirees, the end of the year brings a critical financial deadline: the **Required Minimum Distribution (RMD)**. Failing to take your RMD on time is one of the most expensive mistakes in retirement, triggering a massive 25% IRS penalty on the amount you failed to withdraw.
The RMD age, set by the SECURE 2.0 Act, is **73** for individuals born between 1951 and 1959. This means 2025 is a critical year for those born in 1952 (turning 73) and 1951 (who turned 73 last year).
Don't panic. Use this 5-minute checklist to confirm your 2025 RMD deadline and get it done.
The 5-Minute RMD Checklist
Step 1: Find Your Deadline
Your deadline depends on your birth year. Find your situation below:
- I am already taking RMDs (born in 1950 or earlier): Your 2025 RMD deadline is **December 31, 2025**.
- I turned 73 in 2024 (Born in 1951): You have a special two-part deadline. Your first RMD (for 2024) was due by **April 1, 2025**. Your second RMD (for 2025) is due by **December 31, 2025**. Yes, this means you must take *two* distributions in 2025.
- I am turning 73 in 2025 (Born in 1952): This is your first RMD year. Your deadline for your 2025 RMD is **April 1, 2026**.
- I inherited an IRA (Beneficiary): The rules are complex, but a key 2025 deadline has emerged. If you are a non-spouse beneficiary subject to the 10-year rule (from an owner who died after 2019 *and* had already started RMDs), you **must** take an annual RMD by **December 31, 2025**. Consult a tax advisor immediately.
⚠️ The "Two RMD" Trap
If you were born in 1951 and delayed your first RMD to April 2025, you must also take your 2025 RMD by December 31, 2025. Taking two RMDs in one year will increase your taxable income and could push you into a higher tax bracket or affect your Medicare premiums.
Step 2: Identify Which Accounts Need an RMD
Review your accounts. RMDs are required from "tax-deferred" accounts:
- Traditional IRAs
- SEP IRAs
- SIMPLE IRAs
- 401(k) and Roth 401(k) accounts (Note: See below)
- 403(b) and 457(b) plans
- Roth IRAs: Original owners do **NOT** have to take RMDs.
- Roth 401(k)s: Thanks to the SECURE 2.0 Act, RMDs are **NO LONGER** required for Roth 401(k)s as of 2024. If your plan administrator hasn't adopted this rule yet, you can roll your Roth 401(k) to a Roth IRA to avoid the RMD.
Step 3: Calculate Your 2025 RMD Amount
Your RMD is calculated using two numbers:
- Your Account Balance on December 31, 2024: Look at your year-end statement from last year.
- Your Life Expectancy Factor: Find this in the IRS's "Uniform Lifetime Table." (Most custodians calculate this for you).
The Formula: (Dec. 31, 2024 Balance) / (IRS Life Expectancy Factor) = 2025 RMD.
Your brokerage or plan administrator usually calculates this for you and reports it on your statement. **Action:** Log in to your account or check your mail for a notice titled "Required Minimum Distribution."
Step 4: Take the Withdrawal
- For multiple IRAs: You must calculate the RMD for each Traditional IRA separately, but you can add them up and take the total amount from just *one* of the IRAs.
- For multiple 401(k)s: You must calculate and take the RMD from *each* 401(k) plan separately.
- Consider a QCD: If you are 70½ or older, you can donate up to \$108,000 (for 2025) directly from your IRA to a charity as a **Qualified Charitable Distribution (QCD)**. A QCD satisfies your RMD and is not counted as taxable income.
Step 5: Confirm the Distribution
Don't wait until the last week of December. Initiate your withdrawal request well before the deadline. Once the funds are out, confirm the transaction and set a reminder to check your 1099-R tax form in January/February.
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