What you need to know:
This provision is mandatory. Beginning January 1, 2023, the required minimum distribution (RMD) age increased from 72 to 73. For a participant who was born after December 31, 1950, their RMD will not begin earlier than April 1 of the calendar year following the year they attain age 73. This age becomes 75 after December 31, 2032.
Another change to the RMD rules effective January 1, 2023, the excise tax on a failure to take an RMD is reduced from 50% to 25%. If certain conditions are met, the excise tax may be reduced to 10%.
One last important note for Roth required minimum distribution rules from a 401k – (Not applicable to plans that do not have Roth sources) This provision is mandatory. – generally effective for taxable years beginning January 1, 2024, Roth balances are no longer included in the calculation or distribution of RMD amounts for participants in qualified plans during their lifetime.
The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
Securities and investment advice offered through Investment Planners, Inc. (Member FINRA/SIPC) and IPI Wealth Management, Inc., 226 W. Eldorado Street, Decatur, IL 62522. 217-425-6340.