Required Minimum Distributions: What Long Island Retirees and Heirs Should Do Before December 31
Every fall, retirees and families around Nassau and Suffolk ask me the same question: "Do I have to take money out of my IRA before the end of the year?" For many people the answer is yes. Required minimum distributions, usually called RMDs, are one of the few tax deadlines that land on December 31 instead of in April, and missing one can be expensive.
What an RMD is
Money in traditional IRAs and workplace plans like 401(k)s and 403(b)s grows tax-deferred, but it cannot sit there forever. Once you reach a certain age, you must withdraw a minimum amount each year, and that withdrawal is generally taxable income.
According to the IRS, you must take your first RMD for the year in which you reach age 73. The amount for each account is figured by dividing the account's balance as of the prior December 31 by a life expectancy factor from the tables in IRS Publication 590-B. Your custodian will often calculate it, but it is worth double-checking.
The December 31 deadline, and the one exception
For most people, each year's RMD must come out by December 31. The exception is your very first one. The IRS lets you delay your first RMD until April 1 of the following year.
That sounds helpful, but there is a catch. If you wait, your second RMD is still due by December 31 of that same year. So someone who turns 73 in 2026 could take the first RMD as late as April 1, 2027, but would then also need the 2027 RMD by December 31, 2027. Two distributions in one year can push you into a higher bracket, so I run the numbers both ways.
A few rules that trip people up
- Multiple IRAs. You calculate the RMD for each IRA separately, but the IRS lets you take the total from one or more of them.
- Roth IRAs. RMD rules do not apply to Roth IRAs while the owner is alive.
- 401(k)s are different. RMDs from workplace plans such as 401(k)s generally have to be taken separately from each plan account.
- Still working. If you are still employed, your current employer's plan may let you delay RMDs from that plan until you retire, unless you own 5% or more of the business. The IRS says this exception does not apply to traditional IRAs, SEP IRAs or SIMPLE IRAs.
If you inherited a retirement account
For account owners who died after 2019, most beneficiaries who are not a spouse must empty the inherited account by the end of the tenth year after the year of death. The IRS lists exceptions for a surviving spouse, a minor child of the owner, a disabled or chronically ill person, and someone not more than ten years younger than the owner.
The ten-year rule does not always mean you can wait ten years. Under IRS final regulations that apply beginning in 2025, if the original owner had already reached the age for required distributions, annual distributions generally have to continue during the ten-year period, with the rest paid out by the end of the tenth year. If the owner had not reached that point, no distribution is generally required before the tenth year. And if the owner died this year before taking this year's RMD, the beneficiaries are generally responsible for taking it. These rules turn on the owner's age, the date of death and the type of account, so check before assuming you have nothing to take this year.
What happens if you miss one
The IRS charges an excise tax of 25% of the amount you should have withdrawn and did not. That drops to 10% if the RMD is corrected in a timely manner, generally within two years. The IRS also says the tax may be waived for a reasonable error if you file Form 5329 with an explanation and take the missed distribution.
Giving to charity from your IRA
If you are 70 and a half or older and already give to charity, a qualified charitable distribution, sent directly from your IRA to the charity, can count toward your RMD. There is an annual limit that is adjusted for inflation, so check current IRS guidance for this year's figure.
A New York note
New York offers its own break. According to the Department of Taxation and Finance, if you were 59 and a half or older for the entire year, you may be able to exclude up to $20,000 of qualifying pension and annuity income on your state return. When an account is inherited, the total exclusion for the deceased person and all beneficiaries cannot exceed $20,000 a year and is shared among the beneficiaries. It does not change your federal RMD, but it can soften the state tax bite here on Long Island.
Your year-end checklist
- List every traditional IRA, 401(k), 403(b) and inherited account you own.
- Confirm this year's RMD for each one with your custodian.
- Decide whether to have federal and New York tax withheld from the distribution.
- Request distributions early in December, not on December 30.
This post is general information, not advice for your situation. If you are not sure what you need to take this year, or you are handling a loved one's accounts, call or text me at 631-625-5877. I work remotely or at your home by appointment.
Sources
This article is general information, current as of October 30, 2026, and is not tax, legal, or financial advice for your specific situation. Tax rules change, so please check with a professional before acting.