Do I have to take RMDs if I’m still working?


Q. If you’re 71 and still working, do you still have to take Required Minimum Distributions (RMDs)?
— Still working

A. The short answer is yes.

Whether you’re working or not, you must start taking your RMDs at age 70 ½.

The IRS website says “You must take your first required minimum distribution for the year in which you turn age 70½. However, the first payment can be delayed until April 1 of the year following the year in which you turn 70½.”

For instance, if you turned 70 ½ on Oct. 23, 2019, you can postpone taking a distribution until April of 2020, said Victor Cannillo, founder of Baron Financial Group in Fair Lawn.

He said in 2020, you will need to take two distributions: one by April 1 for the previous year, and the other by Dec. 31 for the current year.

Cannillo warned you can face a hefty penalty if you don’t take your RMDs on time.

“The penalty for not taking one’s RMD from an IRA, according to the IRS, can be 50 percent of the amount that was not distributed,” he said. “For example, if one is required to take $1,000 of RMD this year, failing to do so may cause a $500 tax bill.”

If the money is not needed right away, Cannillo said, the RMD can be placed in a taxable account to be invested for the future.

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This story was originally published on Oct. 31, 2019. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.

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