Retirees who have not made their first mandatory retirement plan withdrawal have seven days to do so and avoid a penalty.

Payments from retirement plans are usually made by the end of the year. However, retirees who turned 72 in 2022 are covered by a rule allowing those involved in workplace retirement plans to wait as late as April 1 to take their first required minimum distribution payment. This deadline only applies to retirees receiving their first payment. Future payments must be made by Dec. 31, according to the IRS.

WAGES FOR LOWEST EARNING WORKERS INCREASED DRASTICALLY OVER THE LAST THREE YEARS

Any retirees who fail to withdraw their first required minimum distribution or do not take out enough money for the payment will receive a 25% penalty based on the amount recipients need to withdraw. The exact amount one should withdraw every year for their distributions is usually calculated by dividing each retirement account’s prior balance on Dec. 31 by a “distribution period” published every year by the IRS, according to CNBC.

The retirement plans that this deadline applies to include traditional, SEP, and SIMPLE IRAs while the original owner is alive. It also applies to those who own 401(k), 403(b), and 457(b) plans. For the 2022 distribution, the amount can be found on the 2021 Form 5498, which was issued to owners of retirement plans in 2022.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

Recipients who are receiving this distribution by April 1 should also know that it is taxable for the 2023 tax year and needs to be reported on one's 2024 tax return.

Additional information regarding this deadline can be found online on the IRS's website.