Understanding Your Required Minimum Distributions (RMDs): Who’s Responsible—and What Happens If You Miss?

As the December 31 deadline approaches, many retirees start asking the same important question about Required Minimum Distributions (RMDs):

“Is it the custodian’s job to tell me my RMD amount—or is it my responsibility to know?”

It’s a fair question, especially because missing an RMD can be surprisingly costly.

Who’s Responsible for Knowing Your RMD?

While your custodian may calculate your RMD for you, the IRS ultimately holds you responsible for taking the correct amount each year once you reach RMD age. That means relying solely on statements or reminders can put you at risk if something is missed or miscalculated.

Your advisor should be reaching out as the year winds down to ensure everything is on track. If they haven’t, now is the time to ask.

The Cost of Missing an RMD

Many people are shocked to learn how steep the penalties can be. As Ed Slott, CPA—known nationwide as “The IRA Guru”—explains:

“It is a 25% penalty unless it is corrected within two years. Even if you correct it on time, it is still a 10% penalty. Making the RMD deadline should never be a source of stress. You actually have access to your RMD amount for the year as soon as January arrives.”

That means you can—and should—plan early. Increasingly, retirees are mapping out their entire RMD strategy in the first quarter of the year to avoid surprises and maximize overall tax efficiency.

Best Practice: Bring Your CPA Into the Conversation

Even small RMD mistakes can snowball into major tax issues. One of the smartest moves you can make is to include your CPA along with your insurance or financial advisor when discussing RMD strategy.

The small amount you may pay for coordinated professional advice can save you thousands in penalties, avoid IRS headaches, and ensure your withdrawal strategy works in your favor—not against you.

Want Help Understanding Your RMD or Planning Ahead?

If you’re unsure about your RMD, your options, or how to avoid unnecessary taxes, reach out anytime.

📩 Contact: js@joesimon.solutions