(UNITED STATES) Many immigrants who settle in the United States 🇺🇸 end up with U.S. retirement accounts through work or by rolling over savings after arriving. The rules for the required minimum distribution (RMD) can feel confusing, but the process follows a clear path year by year. Below is a complete, step‑by‑step guide to help you plan ahead, know what to do at each stage, and avoid penalties like the excise tax if something goes wrong.
Big-Picture Roadmap and Timing
- RMD age: 73 for most people today (people born between 1951 and 1959 reach RMD age at 73).
- First RMD deadline: April 1 of the year after the year you turn 73 (this is your required beginning date).
- Ongoing RMDs: December 31 every year after that.
- Future change: Beginning in 2033, the RMD age will rise to 75 for people born in 1960 or later.
- Exception: A Roth account (like a Roth IRA) is not subject to RMDs during the owner’s lifetime.
According to analysis by VisaVerge.com, immigrants with mixed account types often face the hardest choices in the first RMD year because deferring the first withdrawal to April 1 of the next year can stack two taxable payouts in a single calendar year.
For authoritative rules, see the IRS RMD FAQs page: IRS RMD FAQs.
Stage 1: One to Two Years Before Age 73
Timeline: Start preparation about 18–24 months before you turn 73.
What to do:
– Inventory every retirement account: traditional IRA, SEP IRA, SIMPLE IRA, 401(k), profit‑sharing, 403(b), etc.
– Mark account types: identify which accounts are traditional (tax‑deferred) and which are Roth.
– Check employer plan rules: confirm if any employer plan lets you delay your first RMD until you retire from that employer (may apply to 401(k), profit‑sharing, 403(b)).
– Note RMD requirements: identify accounts that will require an RMD and those that won’t (e.g., Roth IRA).
What to expect from authorities:
– No filings yet. This stage is planning and organization.
Important tip:
– If your spouse is more than 10 years younger and is your sole beneficiary, you may use the Joint Life Table instead of the Uniform Lifetime Table later. See IRS Publication 590‑B.
Stage 2: The Year You Turn 73
Timeline: January 1 to December 31 of the year you turn 73.
What to do:
– Decide whether to take your first RMD by December 31 of this year or delay it until April 1 of the next year.
– Remember: If you delay to April 1, you’ll likely have two taxable distributions in that next calendar year (the delayed first RMD plus the second year’s RMD).
What to expect from authorities:
– The IRS does not send automatic reminders. The responsibility is on you to act.
Example:
– If you turn 73 in 2025, you can take your 2025 RMD by December 31, 2025, or delay it until April 1, 2026. If you delay, you’ll also need to take your 2026 RMD by December 31, 2026, resulting in two distributions in 2026.
Stage 3: Calculating Your RMD Amount
Timeline: Early in the year (after prior year balances are known).
What to do:
1. Find each account’s balance as of December 31 of the prior year.
2. Use the correct IRS table: the Uniform Lifetime Table for most people, or the Joint Life Table if your spouse is more than 10 years younger and is your sole beneficiary.
3. Compute the RMD: prior‑year balance ÷ table divisor = RMD amount.
What to expect from authorities:
– IRS tables are in Publication 590‑B. Financial institutions may offer calculations, but you remain responsible for accuracy.
Special notes:
– For IRAs, you may calculate RMDs for each IRA and then take the total from one or more IRA accounts.
– For employer plans (like 401(k)s), each plan’s RMD usually must be taken from that specific plan.
– A qualified charitable distribution (QCD) from an IRA or a qualified HSA funding distribution can count toward the year’s RMD. Keep records to show the amount counted.
Stage 4: Taking Your First RMD (and Avoiding a Double Hit)
Timeline: By April 1 of the year after you turn 73 if deferred; otherwise by December 31 of the year you turn 73.
What to do:
– Instruct your custodian to distribute at least your RMD amount.
– Check federal withholding options — withheld tax reduces cash received but still counts toward the RMD.
What to expect from authorities:
– Distributions are reported on Form 1099‑R. Include the distribution on your tax return for the year you received the money.
Practical choice:
– Many new retirees prefer taking the first RMD by December 31 of the year they turn 73 to avoid having two RMDs counted as income in the following year.
Stage 5: Annual RMDs After the First Year
Timeline: Every year by December 31.
What to do:
– Repeat the calculation using prior December 31 balances and the proper age divisor.
– Set automatic reminders for early fall so you can correct issues before year‑end.
What to expect from authorities:
– No routine reminders; penalties apply if you fall short.
If you’re still working:
– For employer‑sponsored plans, you may delay the first RMD until April 1 after the year you retire from that employer — if the plan allows it. This deferral does not apply to IRAs.
Stage 6: Special Rule for Roth Accounts
Timeline: Ongoing.
What to do:
– Know that a Roth account in your own name (e.g., a Roth IRA) does not require RMDs during your lifetime. Funds can remain untouched.
What to expect from authorities:
– No RMD enforcement on Roth IRAs during the owner’s lifetime.
Why it matters:
– You can let Roth funds grow tax‑free and choose to take RMDs from traditional accounts first, giving you tax planning flexibility.
Stage 7: If You Miss or Underpay an RMD
Timeline: Act immediately when you notice a shortfall.
What to do:
– Act quickly to correct the underpayment. The law imposes an excise tax on the shortfall.
– Standard penalty: 25% excise tax on the amount not withdrawn on time.
– Possible reduction: If you fix the mistake during the correction window and properly report it, the excise tax can drop to 10%.
– Request a waiver if the shortfall was a reasonable error and you are taking steps to fix it. File Form 5329 and attach a letter of explanation. See: Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax‑Favored Accounts.
What to expect from authorities:
– The correction window starts when the excise tax is imposed and ends on the earliest of:
– The date the IRS mails a deficiency notice about this tax,
– The date the tax is assessed, or
– The last day of the second tax year that starts after the tax year when the excise tax was imposed.
Documentation to keep:
– Account statements showing the shortfall and the catch‑up distribution.
– Your filed Form 5329.
– Your explanation letter and proof of the error (e.g., transfer delays, custodian setup issues).
Stage 8: Employer Plans and the “Still Working” Rule
Timeline: Applies if you’re 73 and still employed by the plan sponsor.
What to do:
– Ask your plan administrator whether it allows RMD deferral until April 1 after the year you retire from that employer.
– If allowed, decide whether deferral helps your tax situation.
What to expect from authorities:
– This deferral is plan‑specific for defined contribution plans (401(k), profit‑sharing, 403(b)) and does not apply to IRAs.
Stage 9: Newcomer Considerations and Common Scenarios
Moving pieces to watch:
– Multiple accounts: Track each account’s RMD calculation, especially with both IRAs and 401(k)s.
– Tax year income: Delaying the first RMD to April 1 causes two RMDs in one tax year, potentially raising your tax bill.
– Cross‑border lives: If you split time abroad but remain a U.S. tax resident, U.S. RMD rules still apply to your U.S. accounts. Keep your bank or custodian contact info up to date to avoid distribution delays due to address or ID checks.
Simple fall checklist:
– Confirm prior December 31 balances.
– Pick the correct IRS table (Uniform or Joint Life).
– Calculate each RMD.
– Choose the account(s) from which to withdraw.
– Set a withdrawal date well before December 31.
– Keep records of any QCDs or qualified HSA funding distributions that will count toward your RMD.
What Success Looks Like and When to Ask for Help
If you follow these steps, you will:
– Meet the required minimum distribution on time each year.
– Avoid the excise tax by catching problems early within the correction window.
– Use the flexibility of a Roth account to manage tax timing and which funds you tap first.
Seek professional guidance when:
– Your spouse is more than 10 years younger and you’re unsure which table applies.
– You hold several employer plans with different rules.
– You missed an RMD and need to file Form 5329 with an explanation.
VisaVerge.com reports that early planning—starting 18 months before your first RMD—reduces errors, especially when people change jobs, roll over accounts, or split funds between traditional and Roth options.
Year‑by‑Year Snapshot
- Two years before 73: Inventory accounts; confirm which need RMDs and which are Roth; learn plan‑specific rules.
- Year you turn 73: Decide to take the first RMD by December 31 or delay to April 1 of the next year; plan for the tax impact.
- Each following year: Calculate and take your RMD by December 31; keep copies of statements and confirmations.
- If a shortfall occurs: Fix it fast, file Form 5329, and seek the lower 10% rate or a waiver when conditions are met.
By staying organized, timing withdrawals, and keeping paperwork in order, you can meet every deadline with confidence and keep your retirement plan on track while you build your life in the United States.
This Article in a Nutshell
This guide explains the RMD process for immigrants and other U.S. taxpayers who hold retirement accounts. Most people must begin RMDs at age 73, with the first distribution due by April 1 of the year after they turn 73 unless taken by December 31 that year; starting in 2033, the age will increase to 75 for those born in 1960 or later. Roth IRAs are exempt from lifetime RMDs. Plan 18–24 months ahead by inventorying accounts, identifying Roth versus traditional funds, and checking employer plan deferral rules if still employed. Calculate annual RMDs using prior‑year balances and IRS tables (Uniform or Joint Life). Employer plans generally require RMDs from each plan, while IRA RMDs can be aggregated. If you miss an RMD, the default excise tax is 25% of the shortfall, possibly reduced to 10% if corrected promptly and reported on Form 5329 with a waiver request. Keep records, set reminders, and seek professional help for complex situations.
