Retirement 2023: Retirees need to withdraw first payment from retirement plans in 10 days

Retirees who turned 72 in 2022 have until April 1st to make their first mandatory retirement plan withdrawal to avoid any penalties

However, this deadline only applies to retirees receiving their first RMD, after which future RMD payments must be made by December 31st, according to the IRS.

This deadline applies to traditional, SEP, and SIMPLE IRAs while the original owner is alive, as well as those who own 401(k), 403(b), and 457(b) plans. The amount for the 2022 RMD can be found on the 2021 Form 5498, which was issued to owners of retirement plans in 2022.

If retirees fail to withdraw their first RMD or if they do not take out enough money for the payment, they will receive a 25% penalty based on the amount recipients need to withdraw. Each retirement account’s prior balance on Dec. 31st is usually calculated by dividing by a “distribution period” published annually by the IRS, according to CNBC.

The deadline might not apply to April 1st for some retirees. For instance, for those still working for their employers, the deadline only applies if their workplace plan permits.

Recipients who are receiving this RMD payment by April 1st should know that it is taxable for the 2022 tax year and needs to be reported on one’s 2023 tax return. Additional information regarding this deadline can be found on the IRS’s website.

For further information about retirement planning, click on this link to read more from The Washington Examiner