4 days ago 5

What Happens If You Don't Take Your RMD by April 15?

Eric Reed

Wed, Apr 16, 2025, 7:21 AM 8 min read

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While there are reporting requirements on your tax return due April 15 regarding your RMDs, the deadlines for taking these distributions out of your account have two other particular deadlines. By April 15th and beyond, you have already missed both deadlines for the prior year’s RMD, but you can act quickly to minimize any potential penalties. Here’s what to know. You can also consult a financial advisor for professional guidance.

Required minimum distributions, or "RMDs," are a minimum amount that you must withdraw each year from every pre-tax portfolio that you hold. This does not apply to Roth portfolios or taxed investments, and it applies to every pre-tax portfolio independently. So, for example, if you hold a 401(k) and an IRA you would need to take a separate required minimum withdrawal from each.

If you hold multiple IRA portfolios, you are allowed to collectively consider them a single, combined, IRA. This allows you to take your full IRA required minimum distribution from a single account.

The purpose of required minimum distributions is to ensure that you pay taxes on the money in your pre-tax retirement accounts. By requiring a withdrawal the RMD triggers a tax event, which is how the IRS makes sure you eventually pay income taxes on the money in your pre-tax portfolios. The full value of each withdrawal will count toward your taxable income for the year.

Required minimum distributions for each year are calculated based on two factors: your age and your account balance as of December 31 of the previous year. The IRS publishes a table called the Uniform Lifetime Table. To calculate your RMD, you look up your age on this table. For each age, there is a value. You divide your account balance by the value on the Uniform Lifetime Table, and that's the amount you must withdraw this year. For example, say that at end of day on December 31 of last year, you were 80 years old with $1 million in your 401(k). The Uniform Lifetime Table value for age 80 is 20.2, so you would calculate your RMD as:

$1 million / 20.2 = $49,504

You must start taking required minimum distributions in the year that you reach your eligibility age. This age varies based on when you were born. Broadly, at time of writing the eligibility ages are: