first time RMD
Suppose Frank is turning 72 in 2022. The 2021 year end value of his IRA accounts (combined) is $274,000, so his first RMD will be $10,000. However, Frank is planning to delay taking is first RMD until the beginning of 2023 (before April 1, 2023).
Late in 2022, unforeseen circumstances require Frank to withdraw $2,000 from his IRA. How is the balance of his first RMD, to be taken in early 2023, calculated? Is it the 2022 year-end balance, divided by 27.4, minus $2,000 already taken?
I understand that Frank will also have to take his second RMD in full by the end of 2023.
Permalink Submitted by Alan - IRA critic on Mon, 2021-12-13 19:43
His first RMD for 2022 will be unchanged based on the 12/31/2021 balance. The 2000 distribution late in 2022 is applied toward that 2022 RMD, so he now has only 8000 left to take in early 2023. Also, because the 12/31/2022 balance will be reduced by around 2000, his 2023 RMD (divisor 26.5) will be slightly lower than it would otherwise have been had he deferred all of the 2022 RMD. By the same token, his 2022 year end balance will be somewhat higher than it would have been had he taken his full 2022 RMD in 2022. So taking out that 2000 will reduce the amount that it would have higher by 20%.
Permalink Submitted by Arthur Dicker on Tue, 2021-12-14 00:37
Thank you, Alan.
Permalink Submitted by Arthur Dicker on Tue, 2021-12-14 00:37
Thank you, Alan.