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IMPORTANT UPDATES ON REQUIRED MINIMUM DISTRIBUTIONS (RMD’S)

Under the Setting Every Community Up for Retirement Enhancement (SECURE) Act1and its amendments.2 These changes may impact your retirement or financial planning, so it’s important to understand what’s required and how to plan accordingly.

WHAT YOU NEED TO KNOW ABOUT RMD’S

  • If you were born between January 1, 1952, and December 31, 1952, you will turn 73 in 2025, which means you need to take your first RMD no later than April 1, 2026.
  • This applies to all qualified retirement accounts subject to RMD regulations, including IRAs, 401(k)s, and similar plans.

Learn more about RMD’s from the IRS : here 3

PLANNING TIPS TO OPTIMIZE YOUR RMD’S

Choosing when to take your first RMD can have a big impact on your taxes. While you can delay your first RMD until April 1, 2026, taking it by December 31, 2025, could lower your tax burden by avoiding two distributions in one year.

If you delay your first RMD until 2026, you’ll need to take:

  1. The delayed 2025 RMD (due April 1, 2026).
  2. The regular 2026 RMD (due December 31, 2026).

This means two taxable events in the same year, which could push you into a higher tax bracket.
Learn about 2025 tax brackets from the IRS: here 5

QUESTION:    WHAT IF I’M STILL WORKING AT AGE 73?
ANSWER:        Good news—if you’re still working and have a workplace retirement account (like a 401(k) or 403(b)), you might be able to delay RMDs from that account if:

        • You’re still employed.
        • You don’t own more than 5% of the company you work for.
        • Your retirement plan allows this deferral.

However, you’ll still need to take RMDs from any IRAs or accounts with former employers.

THE RMD PROCESS
Getting started is simple. Your account custodian or trustee will handle the distribution and provide you with a Form 1099-R for tax reporting. No extra forms are needed on your end—just be sure to include the RMD amount on your Form 1040 during tax season.

STAY COMPLIANT AND AVOID PENALTIES
Missing an RMD can result in penalties of up to 25% of the missed amount (reduced to 10% if corrected promptly). To avoid this, make sure to plan ahead. If you’re unsure about how these rules apply to you, we’re here to help.

TAKE THE NEXT STEP
If you have questions about your RMD strategy or broader financial planning and wealth management needs, our experienced financial professionals are here to help. Contact us today to explore how we can assist you in achieving your financial goals.