Don't Forget to Take Your Required Minimum Distribution Before the End of the Year
Retirees who are at least 73 years old and have a 401k or Traditional IRA must take Required Minimum Distributions for 2023.For those who already had to take these RMDs in the past, the 2023 distribution must be taken by Dec. 31.
In most years, the IRS give you an automatic extension until April 1 of the next year to take your very first RMD. Because of a change in the law that shifted the age of your first RMD from 72 to 73 in 2023, virtually everyone subject to RMDs in 2023 was already subject to them in 2022. As a result, that particular extension has very little meaning this year.
If you don't take your RMD in time, you will be forced to pay a 25% penalty on the money you were supposed to withdraw but didn't.Note that if you correct that missed RMD within two years, the penalty can get reduced to 10%. Even reduced, though, that's a penalty on top of the taxes you'll end up paying on the distribution. So, if you face an RMD for 2023, you should take it in 2023.
Source Fool.com
