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IRS notice: Those 73+ must make required minimum withdrawals from 401(k)s by year-end

The IRS reminded account holders, and their beneficiaries, with employer-sponsored retirement plans and IRAs, of the upcoming Dec. 31 deadline — or face penalties.

By Lynn Cavanaugh | December 11, 2024 at 11:17 AM
Credit: Khongtham/Shutterstock.com

The Internal Revenue Service reminded those aged 73 and older of the deadline to take required minimum distributions (RMDs) from individual retirement arrangements (IRAs) and 401(k) before the Dec. 31 deadline – or face hefty penalties, the agency said in a Dec. 10 notice.

RMDs must be taken annually from IRAs, 401(k)s, 403(b)s and other retirement plans. These withdrawals are considered taxable income and may incur penalties if not taken on time. Failure to do so subjects the retiree to a 25% (down from 50%) excise tax on the amount not withdrawn, though the penalty drops to 10% if the shortfall is corrected within two years.

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