RMD Reminder: What You Need to Know

What’s an RMD?

RMDs are required minimum distributions investors must take every year from their retirement savings accounts, Required

Minimum Distributions (RMDs) are minimum amounts that individuals generally must withdraw each year from

certain tax-deferred retirement accounts, including Traditional IRAs, SEP IRAs, SIMPLE IRAs, and many employer-

sponsored retirement plans. Roth IRAs are not subject to Required Minimum Distributions (RMDs) during the

original account owner's lifetime.

For individuals born between 1951 and 1959, RMDs generally begin at age 73. Individuals born in 1960 or later

generally will not be required to begin RMDs until age 75.

If you are taking your first RMD, you generally have until April 1 of the year following the year in which you reach your

applicable RMD age to take that first distribution. However, if you delay your first RMD until the following year, you

will also be required to take your second RMD by December 31 of that same year.

Taking two RMDs in one calendar year could increase your taxable income and potentially affect other tax-related

items. After your first RMD year, your annual RMD generally must be taken by December 31 each year.

What are the RMD rules for inherited IRAs?

If you inherited an IRA, including a Roth IRA, you must take RMDs from the account if the original IRA owner was already

taking RMDs. You won’t owe taxes on withdrawals from an inherited Roth IRA if the original owner held the account for at

least 5 years, but you will owe taxes on withdrawals from an inherited traditional IRA. If you inherited an IRA and the original

owner passed away on or after January 1, 2020, it is subject to the Secure Act rules regarding Required Minimum

Distributions where the entire inherited IRA balance would have to be withdrawn by the end of the 10th year after death.

Tax Withholding Reminder

RMDs are generally taxable as ordinary income. When taking your RMD, you should consider whether to have

federal and, if applicable, state income taxes withheld from the distribution.

The appropriate withholding amount will depend on your overall income and tax situation. Taking an RMD could

affect your income tax bracket, taxation of Social Security benefits, and Medicare income-related premiums.

We recommend reviewing your expected income and tax withholding with your tax advisor before year-end to help

avoid an unexpected tax balance or potential underpayment penalties.

Investment Advisory Services offered through Patron Partners, LLC, a Registered Investment

Advisor with the U.S. Securities and Exchange Commission (SEC). Registration does not imply any

level of skill or training. Information presented on this handout is for informational purposes only

and does not intend to make an offer or solicitation for the sale or purchase of any product or

security. It should not be construed as legal or tax advice and is not intended to replace the advice

of a qualified attorney or tax advisor.

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