Minimum required distribution

(redirected from Minimum Required Distributions)

Minimum Required Distribution

The amount that an IRA must begin to distribute to an annuitant by the age of 70.5 or the age of retirement, whichever is greater. The minimum required 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.

Minimum required distribution (MRD).

A minimum required distribution is the smallest amount you must take each year from your retirement savings plan once you've reached the mandatory withdrawal age.

There are MRDs for 401(k) plans, 403(b) plans, and traditional IRAs, and the maximum age you can reach before they start is usually 70 1/2. If you take less than the required minimum, you owe a 50% penalty on the amount you should have taken.

You calculate your MRD by dividing your account balance at the end of your plan's fiscal year -- often December 31 -- by a distribution period based on your life expectancy. If your spouse is your beneficiary and more than ten years younger than you are, you can use a longer distribution period than you can in all other circumstances.

References in periodicals archive ?
In a basic example concerning retirement accounts, if a child's residuary trust is the designated beneficiary of a decedent's retirement plan, the child has the right to stretch the minimum required distributions from the IRA over his or her life expectancy.
Alternatively, a discretionary or "accumulation" trust also provides asset protection while also allowing the trustee discretion in making minimum required distributions.
Not only must longevity be taken into consideration, but both minimum required distributions (MRDs) and unrequired distributions (monies needed to sustain your lifestyle) are important factors.
By taking more than the minimum required distributions from an IRA, the beneficiary will be wasting the years of tax-free compounding that the IRA would generate.
Minimum required distributions ("MRDs") are not required for any retirement accounts for 2009 pursuant to a newly enacted law.
This exclusion is available for taxable Roth IRA distributions as well as minimum required distributions from a traditional IRA through 2007.
The forecast incorporates such factors as cash flows, minimum required distributions and taxes.
The default rule for withdrawal from these plans by non-spouse beneficiaries is to begin minimum required distributions by Dec.
It also proposes several new reforms, including provisions dealing with minimum required distributions, retiree health and incentives for retirees to take annuities.
Under the new rules, starting with the 2005 tax year, an individual over age 70 1/2 can exclude minimum required distributions from the amount of income used to determine whether a taxpayer meets the $100,000 adjusted gross income eligibility limit for Roth Conversion IRAs.
The portfolio includes two equity-indexed annuities, a fixed annuity designed to accept rollovers, a fixed annuity to manage minimum required distributions, and a simplified-issue one-year renewable term life insurance policy.
Some of the most perplexing questions asked these days relate to the selection of beneficiary and alternate beneficiary of one's IRA's and determining the minimum required distributions.

Full browser ?