The deadline for most retirees who turned 73 in 2024 to begin withdrawing their first required minimum distribution from their retirement plan is April 1, per Internal Revenue Service rules. In following years, RMDs must be taken by December 31.
The RMD rule applies to owners of multiple types of individual retirement accounts: traditional, Simplified Employee Pension and Savings Incentive Match Plan for Employees. It also applies to participants in 401(k), 403(b) and 457(b) plans. Roth IRA participants are exempt. Although RMDs are usually taken by the end of the year, retirees who reach age 73 are allowed to delay their first withdrawal until April 1 of the following year.
However, the IRS is reminding retirees who take their first distribution by April 1 that they must also take their second RMD before the end of the year and that both are taxable in 2025. Additionally, IRA trustees are required to either notify IRA owners of their RMD amount or offer to calculate the distribution amount.
According to the IRS, the RMD is calculated by dividing the account balance as of the end of the immediately preceding calendar year—2023, for those who turned 73 last year—by the distribution period listed in the IRS’s “Uniform Lifetime Table.” The IRS also provides RMD worksheets to help retirees calculate the RMD.
For those taking a 2024 required minimum distribution, the IRS suggests consulting the life expectancy tables in Appendix B of publication 590‑B, “Distributions from IRAs.” The IRS notes that Table III shows that the RMD for someone 73 years old in 2024 is typically based on a 26.5-year distribution period and that the balance as of December 31, 2023, should be divided by 26.5 to calculate the 2024 RMD.
How FinTech, AI Tools Can Improve Administration, Access to Financial Planning
Fintech leaders discussed how artificial intelligence and technology can provide investors with more access to financial planning and personalized advice.
Developments in fintech and artificial intelligence continue to provide opportunities to ease the administrative burdens of plan sponsors, plan advisers and recordkeepers, as well as provide participants with more access to personalized investments and advice, according to fintech leaders speaking at Tuesday’s Employee Benefit Research Institute-Milken Institute 2025 Retirement Symposium.
Dan Beck, CEO and co-founder of 401Go, told attendees that one of the most exciting outcomes of using AI is helping retirement plans move past paper-based administration and leveraging technology to access plan data.
“As I’ve talked with partners and potential clients, we go to some of these offices that have rooms of filing cabinets and paper-based systems,” Beck said. “I think a lot of the capabilities that we’re seeing with AI and personalized finance [is that] none of that works if we don’t have good data. … But I think there’s still a fairly big hurdle that we are currently in the state of trying to move everything to digital.”
401Go is a provider of 401(k) plans tailored for small enterprises and individuals. In September 2024, 401Go announced a partnership with Pontera to provide participants the ability to get personalized 401(k) account management from their financial adviser of choice.
Improving Financial Education
Sunil Gangwani, co-founder of Plootus, said many workers lack access to financial planning and advice, and their lack of investing knowledge is a major barrier to improvement. He argued that financial planning information needs to be readily available to employees on their mobile devices or computers, especially because people’s attention spans are so short.
Plootus is a platform that integrates an individual’s expenses, income and retirement plan investments all in one place. Plootus then provides personalized recommendations that aim to optimize investment performance, minimize fees and align with the employee’s retirement goals.
“You need to see the overall picture of the user, not necessarily just [their] 401(k) plan [savings],” Gangwani said.
With the stock market in turmoil, Gangwani said platform users have been asking for investment advice. While the platform encourages staying the course for long-term investing, Gangwani said Plootus is able to provide advice on how individuals should minimize their risk and make adjustments.
Increasing Personalization
Ana Mahony, founder and CEO of financial wellness platform Addition Wealth, argued that the technology and data available today enable a level of personalization that previously was unavailable. Such personalization can be used to provide certain types of workers, such as gig workers or medical practitoners, access to financial planning and retirement savings.
Mahony said gig workers often do not have access to a workplace retirement plan, but fintech companies can provide products suited to their specific needs. As an example, Mahony said providers could create a debit card that offers rewards for expenses that gig workers often incur, such as gas, car maintenance or different types of insurance. She said providers should be thinking about the type of support from which gig workers could benefit, as they often have inconsistent earnings and do not have the safety net of benefits that other workers have.
“You can actually build an entire ecosystem that helps educate people in [a] mobile app … and then also pull in different partners that have a vested interest in engaging with that group—and hopefully even have purchasing power—so that you can bring best-in-price models to that group of workers,” Mahony said.
Expanding Alts Options
Cash Lafferty, founder and CEO of PandoAlts, explained that technology and AI can also help investors gain more access to alternative investments. He said high-net-worth individuals and those who invest for pensions and endowments are probably about 50% allocated toward alternative investments and private markets, whereas the average investor is in a 60/40 stocks-and-bonds portfolio.
Lafferty argued that private-market access has been limited by legacy technology infrastructure, a limit he said needs to change.
“With AI, it really is just a tool to be able to extract information and put it into a place where we can start to consume these [alternative investments] into portfolios in a way that meets the needs of the investor,” Lafferty said.
He added that AI can also be trained to adhere to the guidelines of the Employee Retirement Income Security Act, which is important when plans are considering adding alternative investment options to their plan menu.
Lafferty’s PandoAlts connects wealth managers, general partners and broker/dealers on one platform to simplify alternative investing.
