10 Things To Know About the Required Beginning Date For IRAs

This article, written by Ed Slott IRA Analyst, Sarah Brenner, originally ran on The Slott Report.

Photo by Anthony DELANOIX on Unsplash

Adding money to an IRA is easy. Knowing when and how to take money out of an IRA while complying with all the rules and regulations surrounding IRAs and retirement plans — that is the tricky part.

All IRA owners must begin taking Required Minimum Distributions or RMDs from their IRA by April 1 of the year after the year they turn 70 ½.

But the rules don’t stop there.

This article, written by Ed Slott IRA Analyst, Sarah Brenner, originally ran on The Slott Report.

You can learn more about IRAs from Ed Slott and his team, by clicking here.

10 Things To Know About the Required Beginning Date For IRAs

By Sarah Brenner, JD
IRA Analyst
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@theslottreport

If you have an IRA, you may have heard the term “required beginning date” or “RBD.” This is an important date that every IRA owner should understand. The significance of the RBD is not limited to IRA owners. It is a critical date for IRA beneficiaries as well. Here are 10 things you need know about the RBD:

  1. The RBD for an IRA owner is the date by which the first required minimum distribution (RMD) must be taken.
  2. For IRA owners, the RBD is always April 1 of the year following the year they reach age 70 1/2.  There is no exception to this rule for IRAs.
  3. There are a few exceptions to the April 1 RBD for plan participants. These include the “still working” exception for employer plans and the “old money” exception for 403(b)s. These exceptions do not apply to IRAs.
  4. The ability to delay an RMD until April 1 of the next year is only available for your first RMD. RMDs for later years must be taken by December 31 of the same year.
  5. If an IRA owner dies before their RBD, there is no RMD due for the year of death, even if the IRA owner was age 70 ½ at the time of their death.
  6. If the IRA owner dies after their RBD, the year-of-death RMD must be taken by the beneficiary if the IRA did not take it before death.
  7. If an IRA owner dies before their RBD, options for beneficiaries include stretching the distributions over life expectancy or the five-year rule.
  8. If the IRA owner dies on or after their RBD, the five-year rule is not an option.
  9. If the IRA owner dies on or after their RBD, RMDs from the inherited IRA can be taken over either the life expectancy of the beneficiary or the IRA owner, whichever is longer.
  10. There is no RBD for Roth IRAs because Roth IRA owners do not have to take RMDs during their lifetime.