Information regarding RMD Requirement sbeginning at age 73
Hi Terry, My wife and I love your columns and read them every Sunday in our Chicago Tribune.
I turn 73 this year and received a notice from our bank about the RMD requirement I must take from my IRA “once I reach the age of 73”, meaning my birthday.
As you know, this is incorrect as your RMD may be taken any time during the calendar year of your turning 73 and NOT after you turn that age. Is there any reason why more financial advisors do not provide this correct information?
Almost all columns I’ve seen contain the mistaken information about the RMD requirement and taking them “once turning 73″/ your 73rd birthday. My brother’s birthday is on December 31st, and he waited the entire year to take a distribution when he had the choice to take as soon as January 1st of the calendar year when he was turning 73. That is a big difference from being able to take the RMD almost 12 months earlier in January than 12/31 if that is what he wanted to do (it was).
My question is: How can this incorrect notion of the requirement to wait until your 73rd birthday be changed. I have read so many financial columns, attended numerous retirement lectures and STILL hear the same incorrect information being given. When I point this out, most attendees are incredulous to hear it and even some financial advisors are taken aback by the correct “calendar year” RMD distribution option. Thank you and appreciate all you do for us! Tom Bober
Terry Says
I don’t know what columns you’re reading, but you didn’t read that here! Actually, as you likely know, you can even wait until April 1 of the year AFTER your turn 73 to take your first RMD. Of course, that would mean taking TWO RMDs in the same year (including the one for the current year) – And that could be a mistake, putting you into a higher tax bracket, or even impacting your Medicare premiums.
Yes, take your first RMD any time during the year you reach age 73. Even the last day — though I wouldn’t push it, in case the custodian is jammed with year-end requests!
