Required Minimum Distribution - RMD

What is a 'Required Minimum Distribution - RMD'

A required minimum distribution (RMD) is the amount that Traditional, SEP and SIMPLE IRA owners and qualified plan participants must begin distributing from their retirement accounts by April 1 following the year they reach age 70.5. RMD amounts must then be distributed each subsequent year.


BREAKING DOWN 'Required Minimum Distribution - RMD'

These required minimum distributions are determined by dividing the prior year-end fair market value of the retirement account by the applicable distribution period or life expectancy.

Some qualified plans will allow certain participants to defer beginning their RMDs until they retire, even if they are older than age 70.5. Qualified plan participants should check with their employers to determine whether they are eligible for this deferral.

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RELATED FAQS
  1. Can I defer my RMD or stop it?

    I am 76 years old. This year, I will have W2 income of $100,000 plus a SS income of $45,000. ... Read Answer >>
  2. I'm 70.5 and still working for my own company. Can I defer starting my required minimum ...

    The option to defer starting your required minimum distribution (RMD) beyond age 70.5 is available only if the individual ... Read Answer >>
  3. I'm an 80 year old making increasing required minimum distribution (RMD) tax payments. ...

    First, some background information: the tax treatment of a Roth IRA distribution depends on whether or not the distribution ... Read Answer >>
  4. Should I start taking my RMD based on the amount in my account when I turn 70.5?

    Because your balance may have changed from December 31 to the date you reach age 70.5, using that balance may result in an ... Read Answer >>
  5. If I roll over my IRA into a 403 pension plan, can I postpone my Required Minimum ...

    I will be 70 1/2 years by next month and I am required to take RMD from my IRA either this year or 2 distributions next year. ... Read Answer >>
  6. What are the rules and reporting requirements for a rollover of a required minimum ...

    An RMD may be transferred between IRAs, but it may not be rolled over once distributed. If the RMD amount is rolled over ... Read Answer >>
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