If you're 73 or older and have money sitting in a traditional IRA or 401(k), the IRS expects a cut every single year.
Miss that withdrawal, and the penalty used to be a brutal 50% of whatever you should have taken out.
Thanks to a change tucked into the SECURE 2.0 Act, that penalty dropped to 25% — and it can fall to just 10% if you fix the mistake fast.
Say your required minimum distribution was $10,000 and you skipped it entirely.
Under the old rules, the IRS could take $5,000.
Now it's $2,500, or as little as $1,000 if you catch it and file the right paperwork.
That's real money staying in your pocket, but only if you know the escape hatch. **Why the deadline trips people up** The first RMD is the sneaky one.
You get a one-time grace period: you can delay your very first withdrawal until April 1 of the year *after* you turn 73.
Sounds helpful, but it's a trap for the unprepared.
If you delay that first one, you'll be forced to take two distributions in the same calendar year — stacking income that can push you into a higher tax bracket and bump up your Medicare premiums.
Every RMD after that first one must be taken by December 31.
If you forget, the clock doesn't care. **The 10% fix most people never use** To get the penalty down to 10%, you have to correct the shortfall and file Form 5329 with a reasonable explanation.
The IRS has been surprisingly lenient here — a simple "I miscalculated" or "my advisor retired" often does the trick.
You also need to withdraw the missed amount plus any additional amount the IRS says you owe.
File it, pay the reduced penalty, and move on. **Three ways to never think about this again** First, automate it.
Most brokerages let you set up an automatic annual distribution that hits your account on a date you pick.
Second, if you have multiple IRAs, remember the rule: you can calculate each one separately but take the total from any combination of them.
A 401(k) is different — each plan stands alone, so you can't mix and match.
Third, and this is the one people overlook, consider a qualified charitable distribution.
If you're 70½ or older, you can send up to $105,000 per year directly from your IRA to a charity, and it counts toward your RMD.
You never touch the income, so it never hits your taxable income.
For retirees who don't need the cash, this is the cleanest workaround on the books.
It's 73 now, not 72, for anyone who turned 72 after 2022.
If your birthday falls near that line, get a second opinion before you write a check to the IRS. **The bottom line** The reduced penalty is welcome news, but it's still a penalty — and 10% of a large RMD is nothing to shrug off.
Set a calendar reminder, automate the withdrawal, or hand the job to a pro.
Final Thoughts
The IRS isn't going to remind you, and the deadline doesn't move for anyone.