The Required Beginning Date (RBD) is a crucial retirement milestone established by the IRS that sets the deadline for when you must begin taking required minimum distributions (RMDs) from your tax-advantaged retirement accounts. These accounts—including traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, and 457(b)s—allow your savings to grow tax-deferred, but the IRS requires you to start withdrawing and paying taxes on those funds after a certain age to ensure tax revenue is eventually collected.
Understanding When Your RBD Occurs
The RBD is generally April 1 of the year following the year in which you reach a specific age set by law. The exact age depends on your birth year and the current legislation:
- For individuals born before July 1, 1949: The RBD was April 1 of the year after reaching age 70½.
- For those born from July 1, 1949, to 1950: The SECURE Act (2019) raised the RBD age to 72.
- For individuals turning 73 in 2023 or later: The SECURE 2.0 Act further postponed the RBD to age 73.
- For those turning 75 in 2033 or later: The law delays the RBD to age 75.
Always check the latest IRS guidance as these ages can change with new legislation (IRS Publication 590-B).
Why the Required Beginning Date Exists
Congress implemented RBD and RMD rules to prevent tax-deferred retirement accounts from being indefinitely used as estate planning tools to pass wealth untaxed across generations. Instead, these rules encourage retirement savings to be used as income during retirement, ensuring the government eventually collects income tax.
The RBD enforces timely withdrawals, preventing indefinite tax deferral. Over time, legislation like the SECURE Act and SECURE 2.0 Act have adjusted the RBD age to better align with longer life expectancies and new retirement planning realities.
How the RBD Works in Practice
Your first Required Minimum Distribution must be taken by April 1 of the year following the year you reach your RBD age. For example, if your RBD age is 73 and you turn 73 in 2024, your first RMD must be withdrawn by April 1, 2025.
However, if you delay your first RMD until April 1, the same year you take your second RMD will also be due by December 31. This means two RMDs in one year, which could increase your taxable income that year and potentially push you into a higher tax bracket.
Example: If you turn 73 in November 2024, your first RMD is for 2024 and must be taken by April 1, 2025. Your second RMD for 2025 must be taken by December 31, 2025. Taking your first withdrawal in 2024 avoids two RMDs in 2025.
Special Considerations: The “Still Working” Exception
If you’re still employed past your RBD age, you might qualify for the “still working” exception for employer-sponsored plans like 401(k)s and 403(b)s. This exception allows you to delay RMDs from that employer’s plan until April 1 of the year after you retire, assuming you don’t own more than 5% of the company. This exception does not apply to traditional IRAs.
Who Is Subject to the Required Beginning Date?
The RBD applies to individuals holding:
- Traditional IRAs, SEP IRAs, and SIMPLE IRAs
- Employer-sponsored plans such as 401(k), 403(b), and 457(b)
- Inherited IRAs (with rules varying based on relationship and designations)
Exclusions:
- Original Roth IRA owners are not subject to RMDs or RBD during their lifetime, allowing funds to grow tax-free indefinitely. However, beneficiaries inheriting Roth IRAs typically face distribution rules.
Managing Your RBD and RMDs Effectively
Navigating RBD and RMD rules can be challenging but essential to avoid penalties and optimize tax outcomes. Here are some practical tips:
- Mark Your Calendar: Know your RBD early, as deadlines are strict.
- Verify RMD Calculations: Financial institutions usually calculate your RMD, but confirm especially if you have multiple accounts.
- Withdraw Early: Take distributions early in the year to avoid last-minute issues.
- Consider Tax Impact: Since RMDs are taxed as ordinary income, plan to minimize tax burden.
- Use Qualified Charitable Distributions (QCDs): If 70½ or older, donate RMDs directly to charity to reduce taxable income.
- Utilize the “Still Working” Exception: If eligible, delay RMDs from your current employer’s plan.
- Consolidate Accounts: Combining IRAs can simplify RMD tracking.
- Seek Professional Help: Complex situations, such as inherited IRAs, deserve expert advice.
Common Mistakes to Avoid
- Missing the April 1 deadline for first RMD.
- Failing to withdraw the correct amount.
- Confusing Roth IRA rules with traditional IRAs.
- Ignoring tax consequences and their impact on Social Security and Medicare.
Frequently Asked Questions
Q: What if I miss my RBD or an RMD?
A: The IRS imposes a 25% excise tax on the missed amount. Prompt correction can reduce this to 10% (IRS Publication 590-B).
Q: Can I roll over my RMD?
A: No. RMDs cannot be redeposited into retirement accounts; only withdrawals beyond RMDs are eligible for rollover.
Q: Do Roth IRAs have RBDs?
A: No, original Roth IRA owners have no RBD or RMD during their lifetime.
Q: How are RMD amounts calculated?
A: Based on the prior year-end balance divided by an IRS life expectancy factor.
Q: Can I apply my RMD from multiple IRAs collectively?
A: Yes. For IRAs, you can aggregate RMDs but must take employer plan RMDs separately.
Summary Table of RMD Ages by Birth Year
| Birth Year | RMD Age | First RMD Year | RBD Deadline |
|---|---|---|---|
| 1950 or earlier | 70½ | 2019 or earlier | April 1 after turning 70½ |
| 1951 – 1959 | 73 | 2023 – 2034 | April 1 after turning 73 |
| 1960 or later | 75 | 2035 or later | April 1 after turning 75 |
For more information and official details, visit the IRS page on Required Minimum Distributions (RMDs) and see IRS Publication 590-B.
