Retirees who have yet to make their first mandatory retirement plan withdrawal have until the end of April 1 to do so and avoid being penalized.
While payments from retirement plans are usually made by the end of the year, retirees who turned 72 in 2022 are covered by an exception allowing any of them involved in workplace retirement plans to wait until as late as Saturday to take their first required minimum distribution payment, also known as an RMD. After this first payment, future RMD payments must be made by Dec. 31 each year, according to the IRS.
Any retirees who fail to withdraw their first RMD or do not take out enough money for the payment will receive a 25% penalty based on the amount recipients need to withdraw. The exact amount one should withdraw every year for their RMDs is usually calculated by dividing each retirement account’s prior balance on Dec. 31 by a “distribution period” published every year by the IRS, according to CNBC.
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