THE MALDEN ADVOCATE–Friday, June 27, 2025 Page 11 HEAT | FROM PAGE 1 RMD’S FOR 401(K) PLANS W hen must you begin taking Required Minimum Distributions (RMDs) from a 401(k) plan? You must begin taking RMDs from a 401(k) plan in the year you reach age 73 if you have retired and simply left the 401(k) plan account open. This is no different than for a Traditional IRA account. You can wait until April 15th following the year in which you turn 73 to take your first RMD distribution. However, if you do that, you will be doubling up on the RMD distribution. In other words, you will have to take two RMD distributions during that calendar year. However, if you are still working and you are an active participant in the employer’s 401(k) plan, you do not have to take any RMDs from that 401(k) plan until you actually retire. Upon retirement, it might then make sense to roll over any and all 401(k) plans or 403(b) plans into a Rollover IRA account in order to simplify the management of these retirement accounts, avoid overlap in portfolio positions and also to reduce the burdensome paperwork. Furthermore, you eliminate the risk of certain restrictions found in the 401(k) plan document regarding distributions to beneficiaries in the event of your death. The RMD is based upon the account value as of December 31st in the year prior to you reaching age 73. You look to the IRA life expectancy table pursuant to IRS publication 590-B in order to determine the number of years to divide the December 31st balance by. If, for example, the balance in your 401(k) plan or Rollover IRA plan on December 31, 2024 was $1,500,000, and you turned 73 in calendar year 2025, you would divide the $1,500,000 by 26.5 years to arrive at an RMD of $56,604 for calendar year 2025. If you were still working and the only existing retirement account was your 401(k) plan at your current employer, no RMD would have to be taken until you retire. You can work until any age and still not be required to take an RMD. If you name a spouse as the beneficiary of your 401(k) plan, he or she can establish a beneficiary 401(k) account and then roll it over to his or her Rollover IRA account. Your surviving spouse can then withdraw RMDs based upon his or her own life expectancy. When it comes to children beneficiaries, the “stretch” IRA option has been eliminated under the SECURE Act. Children, prior to the Tax Cuts & Jobs Act of 2017, could roll the 401(k) monies into a Rollover IRA account and stretch the RMDs over their lifetime. This resulted in tremendous tax efficiency and the opportunity to grow the investment account further. Under the SECURE Act, children must now withdraw the account in full by the end of the 10th year following the year of the 401(k) owner’s death. This also applies to Traditional IRA accounts. The tax implications to the children are significant and cannot be overlooked. Joseph D. Cataldo is an estate planning/elder law attorney, Certified Public Accountant, Certified Financial Planner, AICPA Personal Financial Specialist and holds a master’s degree in taxation. cord-setter, smashing the previous record for June 24 in particular of 95 degrees in 2013 by 7 degrees. The 102 degrees is also the hottest day EVER in June, recorded in Boston! Previously— only 3 times— the temperature hit 100 degrees in June, in 2021, 1952 and 1925. High (temperature) times, indeed! The 102-degree temperature approached, but did not surpass, Boston's all-time high temperature of 104 degrees, recorded 114 years ago on July 4, 1911. Several organizations called off activities due to the hot weather on Tuesday. The Malden Youth Baseball/Cal Ripken playoff games were postponed due to weather as were the Malden Babe Ruth Baseball games. Malden city officials and state officials urged all residents to take precautions during Tuesday's mini-heat wave. With more hot days coming since the official arrival of summer this past Saturday, June 21, they advised residents to pay attention to the extreme heat conditions and follow these advisories: Staying Cool: • Seek air conditioning: • Stay indoors in air-conditioned spaces as much as possible. If your home lacks AC, go to public places like libraries, malls, or cooling centers. • Limit outdoor activity: • Reduce or reschedule strenuous activities, especially during the hottest parts of the day. • Take cool showers or baths: • Cooling down with water can help lower your body temperature. Wear appropriate clothing: • Choose lightweight, loose-fitting, and light-colored clothing to help reflect heat. Find shade: • If you must be outside, seek shade and use a wide-brimmed hat to protect yourself from the sun. Staying Hydrated: • Drink plenty of water: Carry a water bottle and sip on it throughout the day. • Avoid sugary drinks: These can dehydrate you, so stick to water or electrolyte-rich drinks. Checking on Others: • Look out for vulnerable individuals: Pay attention to the elderly, children, and people with health conditions. • Check on neighbors and family: A quick call or visit can make a big difference in ensuring everyone is safe.
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