Time is nearing to claim a retirement nest-egg without penalty.

Art - Nest Egg w-Glasses
RMD rules apply to owners of traditional, SEP and SIMPLE IRAs while the original owner is alive. They also apply to participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans. RMD rules do not apply to Roth IRAs.

Taxpayers born before July 1, 1945, generally must receive payments from their IRAs and workplace retirement plans by Dec. 31. A special rule allows first-year recipients of required minimum distributions (RMD) payments who reach age 70½ during 2015, to wait until as late as April 1, 2016 to receive their first RMDs. This means that those born after June 30, 1944 and before July 1, 1945 are eligible for this special rule. Payments made to these taxpayers in early 2016 can be counted toward their 2015 RMD; they are still taxable in 2016.


The special April 1st deadline only applies to the RMD for the first year. For all subsequent years, the RMD must be made by Dec. 31st. An example is a taxpayer who turns 70½ in 2014 (born after June 30, 1943 and before July 1, 1944) and received the first RMD (for 2014) on April 1, 2015 must still receive a second RMD (for 2015) by Dec. 31, 2015. 


Though the RMD rules are mandatory for all owners of traditional, SEP and SIMPLE IRAs and participants in workplace retirement plans, some people in workplace plans can wait longer to receive their RMDs. Usually, employees who are still working can, if their plan allows, wait until April 1st of the year after they retire to start receiving these distributions.

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