Upcoming deadlines: March 31 - restate DB plans; April 1 - first RMDs

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Inside This Issue

1. Deadline to restate pre-approved defined benefit plan documents
2. Required Minimum Distributions

Sponsors of defined benefit plans using an IRS pre-approved document have until March 31, 2025, to update their retirement plan for the ‘third six-year cycle.’ See Pre-approved retirement plans – Adopting employer for tips and more information.

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Required Minimum Distributions (RMDs) are minimum amounts you must begin withdrawing from your IRA or retirement plan account when you reach age 73. RMDs cannot be rolled over and are included in your income for the year amounts were distributed.

Roth IRAs are not subject to RMDs until after the death of the original account owner. For 2024 and later years, RMDs are no longer required from Designated Roth accounts in a 401(k) or 403(b) plan.

RMDs from an IRA

You can meet your RMD requirement by taking a withdrawal from one or more of your traditional IRAs, or SEP, SIMPLE and SARSEP IRAs. It’s not necessary to take a withdrawal from each of your IRAs, but your total withdrawals must be at least equal to the total RMD due from all IRAs in the aggregate.

If you reach age 73 in 2024 - you must take your first RMD by April 1, 2025, based on your December 31, 2023, account balance. Your second RMD is due by December 31, 2025, based on your December 31, 2024, account balance.

RMDs from a retirement plan

To satisfy the RMD requirements in a retirement plan, you must take RMDs separately from each of your retirement plans. If you reached age 73 in 2024, your first RMD for 2024 is due by April 1, 2025, based on your December 31, 2023, account balance. Your second RMD, for 2025, is due by December 31, 2025, based on your December 31, 2024, account balance.

If you’re still employed by the plan sponsor, and not a 5% owner of the employer, your plan may allow you to delay taking RMDs from that workplace retirement plan until you retire. IRS rules always require you to take RMDs from traditional IRAs, SEP, SIMPLE and SARSEP IRA plans beginning at age 73, even if you’re still employed.

For more information about the age 73 distribution requirements, see the latest RMD news release or visit IRS.gov/RMD.

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