Required Minimum Distributions (RMDs) can be confusing, and unfortunately, there’s a lot of misinformation out there. Misunderstanding the rules can lead to costly mistakes — including IRS penalties.
Here are some of the most common misconceptions we hear about RMDs, and the facts you need to know:
Myth #1: “I don’t need to take an RMD if I don’t need the money.”
Fact: Whether you want the money or not, the IRS requires you to take an RMD starting at age 73 (as of 2025). Skipping it isn’t an option. If you don’t take your RMD, the IRS can impose a 25% penalty on the amount not withdrawn (reduced to 10% if corrected quickly).
Myth #2: “RMDs apply to all retirement accounts, including Roth IRAs.”
Fact: RMDs apply to most tax-deferred retirement accounts — including Traditional IRAs, SEP IRAs, and SIMPLE IRAs. However, Roth IRAs are exempt from RMDs during the original owner’s lifetime. If you inherit a Roth IRA, different rules may apply.
Myth #3: “I can skip my first RMD if I’m not ready.”
Fact: You can delay your first RMD until April 1 of the year after you turn 73 — but this means you’ll have to take two RMDs in that same year (your delayed one and your current one). This could significantly increase your taxable income for that year.
Myth #4: “My RMD amount is the same every year.”
Fact: Your RMD amount changes each year based on your account balance as of December 31 and your age (using the IRS life expectancy tables). It may go up or down depending on market performance and account value.
Myth #5: “I can take my RMD from just one account, no matter how many I have.”
Fact: If you have multiple IRAs, you can aggregate your RMDs and withdraw the total from one account or spread it out across accounts. But this flexibility does not apply to 401(k)s and other employer-sponsored plans — those must be taken separately from each plan.
Myth #6: “If I miss my RMD, I can just double up next year.”
Fact: Unfortunately, it doesn’t work that way. The IRS penalty applies in the year you missed your RMD. While you should still take the distribution as soon as possible, it won’t erase the penalty.
How MidAtlantic IRA Helps
At MidAtlantic IRA, we calculate your RMD for you each year and remind you of important deadlines. Our goal is to make the process clear, compliant, and stress-free.
Still, every client’s tax situation is different. That’s why we encourage you to talk with your financial or tax advisor about:
- The best timing for your withdrawal
- How your RMD affects your tax planning
- Options for using your RMD strategically (like Qualified Charitable Distributions)
Additional Resources
- IRS: Required Minimum Distributions (RMDs)
- MidAtlantic IRA: What Is a Required Minimum Distribution?
- MidAtlantic IRA: How to Calculate Your RMD
Bottom line: RMDs don’t have to be complicated, but misinformation can make them seem harder than they are. Knowing the facts helps you plan ahead and avoid unnecessary penalties.