Reminder: Most Retirees Must Take RMDs by Week's End, Dec. 30, 2021

The IRS has issued a reminder that required minimum distributions (RMDs) are once again required by December 31, 2021. While the CARES Act waived the RMD requirement for 2020, that relief was not extended into 2021. Clients who have reached their required beginning age (72) must take a distribution based on their account value as of December 31, 2020 by week's end--or risk a 50 percent excise penalty. RMDs are required for all traditional retirement accounts (including 401(k)s and IRAs). However, exceptions do exist for 401(k) participants who continue working past their required beginning date (if the participant is not a 5 percent-or-more owner in the business). Roth IRAs do not require distributions during the original account owner's lifetime. For more information on the penalties for failure to comply with the RMD rules, see Q 3685.