New York - In simple terms. MRD stands for "minimum required distribution."
The Internal Revenue Code established these MRDs to ensure that you actually use your 401k plan for retirement (and not, for instance, to pass onto your heirs). MRDs apply to most retirement accounts including 401k plans, 403(b) plans, 457b plans, profit sharing plans, IRA accounts, Simple IRA accounts and SEP IRAs. They do not apply to Roth IRAs until after the death of the owner.
Effective 2023, anyone whose birthday falls on or after July 1, 20219 has until age 72 to take his/her first RMD. If this applies to you, you have until as late of April 1 of the FOLLOWING year you turn 72 to take your first RMD. After that, your RMD must be made annually by December 31. If you delay your first RMD until the following year and take it on April 1 - you will have to take 2 distributions. If you do not follow these strict MRD rules, you can be liable to an automatic penalty of 25% (effective 2023).
The amount of your MRD is required to be reported to you by your IRA trustee.
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