By Kyle Plotkin
Investment Advisor Representative
[email protected]
One thing I’ve come to realize as I get older is that time seems to move faster and faster. I think back to childhood, when a single school year felt like an eternity. Yet somehow, I’ve just reached my 13th anniversary here at FRS—and it feels like it passed in the blink of an eye.
With that in mind, it’s hard to believe we’re already into the second half of 2025. Now that we’re just five months and change away from a new year, we’ve begun the process of checking that all our clients born in 1952 or earlier have taken their Required Minimum Distributions (RMDs) for the year.
Just as a quick refresher: RMDs are the amounts that Uncle Sam requires you to withdraw from your qualified retirement accounts (IRAs, 401(k)s, etc.) each year once you’ve turned 73. The logic behind the rule is that most people will be in a lower tax bracket in retirement, and these withdrawals are meant to provide income for your later years. In many cases, the most straightforward approach is to take monthly withdrawals—essentially replacing the paychecks you’re no longer receiving.
But what if you don’t need that income? For folks who can cover their living expenses with Social Security, pensions, or other sources, the annual RMD becomes more of a tax-driven exercise than a financial necessity.
Some clients prefer to take their full RMD as a lump sum, often using the funds for travel, home improvements, gifting to grandchildren, or other personal goals. Others take the required amount, withhold taxes, and simply reinvest the proceeds in non-qualified bank or brokerage accounts.
At FRS, we maintain a running list of everyone required to take an RMD each year. Now that we’re in the second half of the year, we’re actively reviewing that list to ensure every client has either taken their distribution—or has a plan in place. Failing to take your full RMD can result in IRS penalties on top of the taxes owed.
If you haven’t finalized your RMD strategy for 2025, now’s the time to do it. Waiting until the last minute is risky—especially as year-end processing delays are common across financial institutions. As I said earlier, the calendar never slows down. Let’s make sure your 2025 RMDs are squared away well before it’s too late.