According to CNBC, data from Fidelity shows a major deadline crunch is brewing for retirees and heirs. As of November 30th, a full 53% of Fidelity investors who need a Required Minimum Distribution (RMD) for 2025 haven’t taken it. Even more striking, 29% of those outstanding RMDs are from inherited IRAs. The annual deadline for these mandatory withdrawals is December 31st for most people, and missing it triggers a steep IRS penalty of up to 25% of the amount that should have been withdrawn. This rule applies to retirees starting at age 73 and to many heirs who have inherited retirement accounts.
Why the last-minute rush?
So why are so many people cutting it so close? I think it’s a mix of procrastination and maybe a bit of strategic tax planning. Let’s be honest, nobody *wants* to take money out of a tax-deferred account and immediately owe taxes on it. Some folks might be waiting until the absolute last moment to keep their money growing tax-free for as long as possible. But here’s the thing: that’s a seriously risky game. A 25% penalty is brutal. It’s not just a slap on the wrist; it’s a major financial hit that completely negates any tiny bit of extra growth you might have eked out by waiting.
The inherited IRA trap
The fact that nearly a third of the missed RMDs are from inherited accounts is particularly telling. The rules for these have gotten incredibly complex in recent years. If you inherited an IRA from someone who passed away after 2019, you’re likely on a 10-year withdrawal clock, and you might have annual RMDs within that window too. It’s confusing! A lot of heirs might not even know they have a requirement, or they might misunderstand the deadlines. This isn’t an area where you can wing it. The IRS has clear guidance on RMDs, and ignorance won’t save you from the penalty.
Don’t be a statistic
Look, if you’re in this boat, you’ve got a little time, but not much. The process isn’t instant. You need to contact your brokerage, calculate the exact amount (they usually help), and decide where that cash will go. Will you need it for living expenses? Reinvest it in a taxable account? Plan for the tax bill? This isn’t just a clerical task. It’s a forced, annual financial planning event. And basically, if you’re relying on a single provider like Fidelity for this data, remember they can only see their own accounts. If you have multiple retirement accounts scattered around, the responsibility to take the RMD from each one is 100% on you. Don’t assume it’s automated. Don’t assume you’ll remember on December 30th. Get it done now.
