Required Minimum Distribution - RMD

What Does Required Minimum Distribution - RMD Mean?
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.

Investopedia explains 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.

Related Terms

In-Service Withdrawal
Individual Retirement Account - IRA
IRA Adoption Agreement and Plan Document
Non-Qualified Distribution
Ordering Rules
Qualified Distribution
Recharacterization
Reconversion
Roth IRA
Roth IRA Conversion
SEP IRA
SIMPLE IRA
Spousal IRA
Triggering Event
More Related Terms

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