Did You Turn 70½ In 2018?

You Must Start Receiving
Retirement Plan Payments
By April 1

If you turned 70½ in 2018, in most cases you must begin receiving payments from Individual Retirement Accounts (IRAs) and workplace retirement plans by Monday, April 1, 2019.

Two Payments In The Same Year

The payments, called required minimum distributions (RMDs), are normally made by the end of the year. Those persons who reached age 70½ during 2018 are covered by a special rule, however, that allows first-year recipients of these payments to wait until as late as April 1, 2019, to get the first of their RMDs. The April 1 RMD deadline only applies to the required distribution for the first year. For all following years, including the year in which recipients were paid the first RMD by April 1, the RMD must be made by Dec. 31.

If you turned 70½ in 2018 (born July 1, 1947, to June 30, 1948) and receive the first required distribution (for 2018) on April 1, 2019, for example, you must still receive the second RMD by Dec. 31, 2019. To avoid having both amounts included in your income for the same year, you can make your first withdrawal by Dec. 31 of the year you turn 70½ instead of waiting until April 1 of the following year.

Types Of Retirement Plans Requiring RMDs

The required distribution rules apply to owners of Traditional, Simplified Employee Pension (SEP), and Savings Incentive Match Plans for Employees (SIMPLE) IRAs but not Roth IRAs while the original owner is alive. The rules also apply to participants in various workplace retirement plans, including 401(k), 403(b), and 457(b) plans.

An IRA trustee must either report the amount of the RMD to the IRA owner or offer to calculate it for the owner.

Some Can Delay RMDs

Though the April 1 deadline is mandatory for all owners of Traditional IRAs and most participants in workplace retirement plans, some people with workplace plans can wait longer to receive their RMD. If you are still working and if your plan allows, you can wait until April 1 of the year after you retire to start receiving these distributions. Check with your employer’s plan administrator to verify your plan’s distribution requirements.

Employees of public schools and certain tax-exempt organizations with 403(b) plan accruals before 1987 should check with their employer, plan administrator, or provider to see how to treat these accruals.