Hello from Sycamore,

If you are 73 and haven’t taken your Required Minimum Distribution (RMD) for the 2024 tax year, you will likely need to by April 1, 2025.

What is an RMD?

An RMD is the minimum distribution you must withdraw from your retirement account each year.

When do I have to begin taking RMDs?

You must begin taking your RMDs by April 1st of the year following the calendar year in which you reach age 73. What does this mean?

  1. Example: Your 73rd birthday was any time in 2024. As long as you will reach age 73 by December 31, 2024, you must take your first RMD (for 2024) by April 1, 2025.

Then each year after this you must take your RMD by December 31 of that year.

Can I take more than my RMD amount?

You can withdraw more than the minimum amount required. The total amount you withdraw will be included in your taxable income.

Can I take withdrawals before 73?

Yes. Once you reach 59 ½ you may take withdrawals with no early withdrawal penalty. You will still be responsible for regular income tax on the complete amount withdrawn.

You may also withdraw funds prior to age 59 ½ however, you will likely need to pay an extra 10% early withdrawal penalty in addition to the regular income tax.

Highlights for 2025

Retirement Savings Plan Contribution Limits have changed.

  1. 401(k), 403(b), 457 plans, and federal government Thrift Savings Plan contribution limits are $23,500.
    1. Catch-up contributions for those over age 50 remain at $7,500.
    2. Catch-up contributions for those aged 60-63 remain at $11,250
  2. IRA contribution limits remain at $7,000.
    1. Catch-up contributions for those over age 50 remain at $1,000.
  3. SIMPLE IRA contribution limits $16,500.
    1. Catch-up contributions for those over age 50 are $3,500.
    2. Catch-up contributions for those aged 60-63 are $5,250
  4. SEP IRA contribution limit is $70,000 in 2025.
  5. The Health Savings Account (HSA) contribution limit for single people in 2025 is $4,300 and for family coverage is $8,550
  6. Qualified Charitable Distribution’s annual limit for 2025 is $108,000.

As always, do not hesitate to reach out to our offices at (765) 455-1554 to discuss this.

Thank you for your continued trust and support,

Sycamore Financial Group

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