RMD
Dear Terry
First of all, thank you so much for your online presence and the wealth (haha) of info you provide here and on the media (I enjoy listening to you on WGN)
I read your articles on RMD. I think I have just one question (fingers crossed)
I had my 73rd birthday this past July (2024)
Do I base my calculations on the balance in my 403B accounts from the end of 2023 or can I wait until, say, January, 2025 to initiate the distribution of funds using the balances shown at the end of 2024? I guess I am unclear if I must initiate the process this calendar year of if I can wait 6 months and do so in January.
I “thought” I read or heard someplace that there is a 6 month “grace” period with no penalty but I could be very mistaken.
Thanks again for all you do for all of us. I know (from hearing callers on WGN) we are all so very grateful.
Best Wishes,
Terry Says
Thanks for your nice note. Actually, you could wait until April 15 of 2025 to take your first RMD– BUT that would likely be a big mistake! YOu see, you’d have to take TWO RMDs in one year — boosting your income, your tax bracket, and quite possibly the monthly premium you pay for Medicare Part B!
So, yes, you should take your first RMD now — before the late fall rush. The amount is based on the total value of your IRA accounts at year-end 2023. (That’s also true if you waited for your first RMD till early next year) Get this done with before they custodians are all jammed up. And make sure they take at least 20% withholding out of your payment.
