IRAs: Required Minimum Distributions (RMDs)

Understand the rules and regulations surrounding Required Minimum Distributions (RMDs) for IRAs and defined contribution plans with this comprehensive guide. Learn when to start taking RMDs, how to calculate the amounts, and the consequences of not complying with the distribution requirements. This guide is essential for IRA owners, especially those approaching the age of mandatory distributions.

Highlights:

• RMD Start Age: Begins at age 73, with the first RMD due by April 1 of the year following the year you turn 73.

• Calculation Methods: Use of the Uniform Lifetime Table and Joint Life and Last Survivor Expectancy Table for determining distribution amounts.

• Multiple Accounts: Rules for aggregating RMDs from multiple IRAs, and separate RMD calculations for different types of plans.

• Penalties for Non-Compliance: A 25% penalty for failing to take the full RMD, reduced to 10% if corrected promptly.

• Withdrawal Flexibility: Options for taking distributions in one or multiple withdrawals throughout the year.