If you forgot to take your required minimum distribution, take it immediately and file to correct the error. The penalty is 25%, but drops to 10% if you fix it within 2 years — and the IRS often waives it entirely for first-time mistakes with reasonable cause.
What to Do Right Now
| Step | Action | Why |
|---|---|---|
| 1 | Take the missed RMD immediately | Withdraw the amount you should have taken |
| 2 | Calculate the correct RMD amount | Account balance ÷ life expectancy factor |
| 3 | File IRS Form 5329 | Report the missed RMD and request penalty reduction |
| 4 | Attach an explanation letter | Explain why you missed it (reasonable cause) |
| 5 | Take the current year’s RMD on time | Don’t miss two in a row |
RMD Penalty Structure
| Situation | Penalty Rate |
|---|---|
| Missed RMD (standard penalty) | 25% of the shortfall |
| Corrected within 2 years | 10% of the shortfall |
| Reasonable cause accepted by IRS | 0% (waived) |
| Previous penalty (before SECURE 2.0) | 50% |
RMD Starting Ages
| Birth Year | RMD Starts At Age | First RMD Deadline |
|---|---|---|
| 1950 or earlier | 72 (already started) | Already passed |
| 1951-1959 | 73 | April 1 after turning 73 |
| 1960 or later | 75 (starting 2033) | April 1 after turning 75 |
Sample RMD Amounts
| Account Balance at Year-End | Age | Life Expectancy Factor | RMD Amount | 25% Penalty If Missed |
|---|---|---|---|---|
| $200,000 | 73 | 26.5 | $7,547 | $1,887 |
| $500,000 | 73 | 26.5 | $18,868 | $4,717 |
| $500,000 | 78 | 22.0 | $22,727 | $5,682 |
| $1,000,000 | 73 | 26.5 | $37,736 | $9,434 |
| $1,000,000 | 80 | 20.2 | $49,505 | $12,376 |
RMD = Prior year-end account balance ÷ IRS life expectancy factor (Uniform Lifetime Table)
Accounts That Require RMDs
| Account Type | RMDs Required? | Notes |
|---|---|---|
| Traditional 401(k) | ✅ Yes | Starting at 73 (or 75 if born 1960+) |
| Traditional IRA | ✅ Yes | Starting at 73 (or 75 if born 1960+) |
| SEP IRA | ✅ Yes | Same as Traditional IRA |
| SIMPLE IRA | ✅ Yes | Same as Traditional IRA |
| 403(b) | ✅ Yes | Same rules as 401(k) |
| Roth IRA (original owner) | ❌ No | No RMDs during your lifetime |
| Roth 401(k) | ❌ No (starting 2024) | SECURE 2.0 eliminated Roth 401(k) RMDs |
| Inherited IRA (Traditional or Roth) | ✅ Yes | 10-year rule or life expectancy, depending on beneficiary |
How to Request a Penalty Waiver
| Element | What to Include |
|---|---|
| Form 5329 | File for the year you missed the RMD |
| Explanation letter | Attach to Form 5329 |
| Reasonable cause examples | Didn’t know about requirement; illness; advisor error; death in family |
| Proof you corrected it | Show that you took the missed RMD |
| Request waiver | State: “I request the penalty be waived due to reasonable cause” |
The Bottom Line
Take the missed RMD immediately — don’t wait. File Form 5329 with a reasonable cause explanation to request a penalty waiver. The IRS is generally lenient on first-time RMD mistakes, especially when you self-correct promptly. The penalty dropped from 50% to 25% (and 10% if corrected quickly) under SECURE 2.0, and full waivers are common for genuine mistakes.
The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy