Don’t Forget Your IRA Distribution

If you were born in 1950 or earlier, it’s time to start calculating the Required Minimum Distribution (RMD) for 2022 from your traditional IRAs, 401(k) plans and other pre-tax retirement plans. Traditional retirement plan contributions are generally made with pre-tax funds and the earnings are tax deferred. But the tax rules don’t allow for those retirement funds to remain untaxed indefinitely. Tax rules for traditional IRA distributions ensure that Uncle Sam gets his share of those funds eventually.

Here are important facts about IRA distributions:

  1. Required Minimum Distribution (RMD) Rules

RMDs are minimum amounts that many retirement plan and IRA account owners must generally withdraw annually after they reach age 72, even if they are still working. Account owners can delay taking their first RMD until April 1 following the later of the calendar year in which they reach age 72 or, in a workplace retirement plan, retire. RMDs are taxable income and may be subject to a 50% penalty if not timely taken. Account holders reaching age 72 in 2022 must take their first RMD by April 1, 2023, and the second RMD by December 31, 2023, and each year thereafter.

  1. Retirement Plan Distributions 

For beneficiaries of 401(k), 403(b) and 457(b) plans; profit-sharing and other defined contribution plans; and defined benefit plans, the first RMD is due by April 1 of the later of the year they reach age 72, or the participant is no longer employed (if allowed by the plan). A 5% owner of the employer must begin taking RMDs at age 72. RMDs may not be rolled over to another IRA or retirement plan.

  1. Inherited IRA Distributions for Non-Spouse Beneficiaries

Traditional IRAs that are inherited by someone other than the owner’s spouse must be distributed within ten years of the inheritance, not over the life of the beneficiary. Distributions now must be taken within a ten-year period after inheritance. This rule, enacted as part of the 2019 Secure Act, eliminated the options for non-spouse beneficiaries to use inherited traditional IRAs as part of his or her own retirement planning.

Tax rules are complicated and can be hard to follow. Plus, the rules are always changing. The rules about taking distributions from traditional IRAs, 401(k) plans and other pre-tax retirement plans have changed over the years, most recently in 2019. Forgetting to take a required IRA distribution means paying a 50% penalty, even if you didn’t know the rule.

Want to know the IRA distribution rules? The IRS has them for you at Need help figuring out the tax rules? Get detailed tax advice that fits your situation from a qualified tax professional. You can find one near you at