Life gets busy—travel, family, work, and everything in between— and it’s easy to let things slip through the cracks. But one thing you don’t want to forget? Your required minimum distribution (RMD). Missing it can lead to a hefty penalty from the IRS. If this happens to you, don’t panic—there are steps you can take to fix it.
🕒 Not sure when RMDs start? For most people, required minimum distributions begin at age 73 under current IRS rules. Your financial advisor can help you understand what applies to your accounts and how to stay on track.
What Are Required Minimum Distributions (RMDs) and Why Do They Matter?
The IRS requires individuals with traditional IRAs, SEP IRAs, SIMPLE IRAs, and qualified retirement plans, like 401(k)s and 403(b)s, to withdraw a minimum amount each year once they reach age 73. If you’re not sure how RMDs apply to you, our retirement planning services can help ensure you stay on track.
Failing to take your RMD on time can be costly. As of 2025, the IRS charges a penalty of 25% on the amount you should have withdrawn. If you correct it within a specific timeframe, the penalty drops to 10%. Either way, you still need to withdraw the missed amount and pay the necessary taxes.
What to Do If You Miss a Required Minimum Distribution
Here’s how to fix a missed RMD and potentially avoid the full penalty:
- Withdraw the missed RMD immediately. The sooner you take the distribution, the better.
- Report the missed RMD on IRS Form 5329. Not sure how to report a missed RMD? You’ll need to file IRS Form 5329. The IRS doesn’t automatically know you missed it, so it’s up to you to self-report.
- Request a penalty waiver if applicable. If you had a reasonable excuse for missing the RMD, you can ask the IRS to waive the penalty by including an explanation with your Form 5329.
Fixing a missed RMD quickly is key to minimizing penalties and tax consequences.
What Happens If You Don’t Take Your RMD on Time (and Face an IRS Penalty)?
While the IRS may not immediately catch a missed RMD, if they do, you’ll owe the penalty plus interest on the overdue amount. And if you’re ever audited, you don’t want that surprise waiting for you.
How to Avoid Missing Future RMDs
Keeping track of RMDs can be tricky, especially if you have multiple retirement accounts. A financial advisor can help you meet your deadlines and optimize your distributions to minimize taxes. If you need guidance, let’s chat—schedule a meeting today.
Michael Nicoletti is a CERTIFIED FINANCIAL PLANNER® professional and works with clients throughout Connecticut and nationwide, offering financial planning and wealth management services. Based in Glastonbury and Wilton, CT, Michael helps families and individuals plan for their financial, insurance, investment, and retirement goals. Schedule a complimentary introductory meeting with Michael.
This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete, it is not a statement of all available data necessary for making an investment decision and it does not constitute a recommendation. RMD's are generally subject to federal income tax and may be subject to state taxes. Consult your tax advisor to assess your situation.
Raymond James and its advisors do not offer tax or legal advice.