Required beginning date


Also found in: Acronyms.

Required Beginning Date

The date by which an IRA must begin distributing payments to the annuitant. Under most circumstances, the date is April 1 of the year following the time that the annuitant turns 70.5. Occasionally, the required beginning date is postponed until the date of retirement, but this is not allowed in situations in which the annuitant owns 5% or more of the company sponsoring the IRA. The amount distributed on the required beginning date may or may not be taxable, depending on the type of IRA. See also: Minimum required distribution.

Required beginning date (RBD).

Your required beginning date is the date by which you must take your first minimum required distribution from retirement savings plans that require distributions.

For an individual retirement account (IRA), it's April 1 of the year following the year you turn 70 1/2. For a 401(k), it's either the April 1 of the year following the year you turn 70 1/2 or the April 1 following the year you retire, unless you own 5% or more of the company sponsoring the plan. If that's the case, your deadline is April 1 of the year after the year you turn 70 1/2.

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This is true even in the year of the death of an account owner who has reached his or her required beginning date (i.e., who is over 70 1/2 and was taking lifetime RMDs).
If death occurs after the age 70 1/2 required beginning date and there is no designated beneficiary, then beneficiaries may do a bit better, but not much.
For purposes of the minimum distribution rules explained in Q 342 to Q 348, and the minimum distribution incidental benefit rule explained in Q 349, the term "required beginning date" means April 1 of the calendar year following the later of (a) the year in which the employee attains age 70/, or (b) the year in which the employee (other than a 5% owner) retires from the employer maintaining the plan.
Distributions are again determined by whether the IRA owner dies before the required beginning date (RBD):
Distributions to a designated beneficiary (see definition on page 412) are determined by whether the IRA owner dies before the required beginning date (RBD):
Required beginning date (RBD) begins the following April.
Since Janice had not yet reached her required beginning date (RBD), prior to her death (generally, age 70 1/2), Marion could take minimum distributions over her own life expectancy.
designated beneficiary: An individual (or a trust meeting special requirements) that is named as beneficiary of an IRA or qualified plan benefit prior to the required beginning date.
(20) This is referred to as the individual's required beginning date.
For traditional IRAs, if the IRA owner dies before beginning distributions (i.e., the required beginning date), there are two basic alternatives.
Individual and employee plans are subject to a 10 percent penalty, tax if you take money prior to retirement, and once you reach your required beginning date (usually April 1 of the year in which you reach 70 1/2), you must take annual minimum distributions in order to avoid a 50 percent penalty tax.
Rather than being required to begin taking distributions shortly after your death (which is what a non-spouse beneficiary would have to do), your surviving spouse can delay the start of distributions until April 1st of the year after your spouse reaches the age of 70 (referred to as the required beginning date, or "RBD").