Year-End RMD Deadline Nears as 25% Penalty Looms for Missed 2025 Withdrawals

Overview

• Most retirees subject to RMDs must complete their 2025 withdrawals by Dec. 31, with an April 1, 2026 option only for first‑year takers.
• The requirement applies to tax‑deferred accounts such as traditional IRAs and 401(k)s, and failing to withdraw the full amount can trigger a 25% tax penalty on the shortfall.
• Outlets advise confirming calculations and payout processing with custodians now, noting that computing the amount generally involves straightforward steps.
• Kiplinger warns that RMD income can raise taxable Social Security benefits, push retirees into higher tax brackets, and increase Medicare IRMAA surcharges.
• Planning moves cited include using qualified charitable distributions to satisfy RMDs tax‑efficiently, calibrating withholding to avoid underpayment penalties, and considering Roth conversions to reduce future RMDs.