This could push you into a higher tax bracket, meaning a larger portion of your Social Security income could be subject to taxes, or you could also end up paying more for Medicare Part B or Part D. Taking two RMDs in one year can have important tax implications. But he’ll have to take his second RMD by December 31, 2022. For instance, a taxpayer who turns 72 in March 2021 has until April 1, 2022, to take his first RMD.

The RMD is taxed as ordinary income, with a top tax rate of 37% for 20.Īn account owner who delays the first RMD will have to take two distributions in one year. This generally applies to the original owner of a traditional IRA, SIMPLE IRA, SEP IRA or a retirement plan, such as a 401(k) or 403(b). All subsequent ones must be taken by December 31 of each year. If you turned 70 ½ in 2020 or later, you should take your first RMD by April 1 of the year after you turn 72. Under the 2019 legislation, if you turned 70 ½ in 2019, then you should have taken your first RMD by April 1, 2020.

The SECURE Act changed when you must start taking RMDs. Here are 12 things you should consider regarding required minimum withdrawals. Once you know the basic rules, you can use smart strategies to minimize taxable distributions and make the most of the money that you must withdraw. There’s no time like the present to get up to speed on the RMD rules. Not only do you need to calculate how much must be withdrawn each year, you must pay the tax on the distributions.

Starting at age 72, Uncle Sam requires taxpayers to draw down their retirement account savings through annual required minimum distributions. After decades of squirreling away money in tax-advantaged retirement accounts, investors entering their 70s have to flip the script.

Download flip out minimum age