Overview
- Vanguard’s review of roughly 400,000 IRA clients shows 6.7% missed 2024 required minimum distributions and 24% withdrew too little.
- The average missed RMD is about $11,600, yielding typical penalties up to $2,900, while $1 million–plus accounts face rarer lapses but average penalties near $8,800.
- Misses are persistent, with 55% repeating the error the next year, and self-directed investors are about three times likelier to miss than those with advisors.
- Automating withdrawals reduced missed RMDs to 0% in Vanguard’s data, and advisors recommend scheduling distributions early in the year.
- The IRS assesses a 25% excise tax that can drop to 10% if corrected within two years; taking the shortfall promptly and filing Form 5329 can secure relief, and RMDs taxed as ordinary income can raise brackets or Medicare premiums.