Required Minimum Distribution

Required minimum distribution (RMD)

The minimum amount that the IRS requires must be withdrawn each year from all tax-advantaged retirement plans starting in the calendar year following the year in which the plan holder reaches age 70-1/2. Roth IRAs are exempt from this rule.

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Required Minimum Distribution

The amount that an IRA must begin to distribute to an annuitant by the age of 70.5 or the date of retirement, whichever comes later. The required minimum distribution may or may not be taxable, depending on the type of IRA. The amount of the minimum required distribution is determined by the value of the IRA, the length of time the annuitant has contributed, and the amount of contributions.

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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 qualified retirement accounts by April 1 after the year they reach age 70.5 years. RMD amounts must be distributed each subsequent year.

Investopedia explains Required Minimum Distribution (RMD) These required minimum distributions are calculated by dividing the retirement account's prior year-end fair market value by the applicable distribution period or life expectancy. Some qualified plans allow certain participants to put off their RMDs until they retire even if they are older than age 70.5. Qualified plan participants should check with their employers about the rules governing RMD requirements.

Related Terms:
• 401(k) Plan
• Individual Retirement Account—IRA
• Qualified Retirement Plan
• Roth IRA
• Tax Deferred