Taxpayers aged 72 and over are required to take a required minimum distribution from their retirement plans each year or face a substantial penalty. December 31 is the last day to take the distribution for 2022.
Some people ignore or put off planning for their future retirement needs. Although the retirement phase of your life may seem to be far in the future, if you want to retire comfortably, you should start planning for it now and the amount you can put away has increased dramatically as of 2023.
If you turn 72 during the current tax year, you are required to begin taking required minimum distributions (RMDs) from your traditional IRA, 401(k) and SEP IRA accounts. If you became 72 in a prior year, you must withdraw your RMD for this year by December 31. Failing to take a RMD could result in a penalty equal to 50% of the required withdrawal amount.
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