If the IRA owner or plan participant died before he or she began taking
required minimum distributions, you can generally elect to distribute the entire interest in the IRA or plan within five years of the owner's or participant's death.
Owners of certain types of accounts will have to eventually start withdrawing their money in the form of
required minimum distributions, or RMDs.
Currently, beneficiaries have the option of taking an inherited IRA via a lump sum or through stretching, which allows them to take
required minimum distributions based on their life expectancy.
For example, our company mails our clients a card that offers a free booklet on the details of
required minimum distribution for IRAs.
Uncle Sam might also teach people to use their
required minimum distribution as an annuity.
Besides the qualification implications, if an amount distributed from a plan is less than the
required minimum distribution, an excise tax equal to 50% of the shortfall is generally levied against the individual (not the plan).
The amount of the
required minimum distribution (RMD) is calculated by dividing the IRA account balance at the end of the previous year by the life expectancy of the IRA owner and another person.
The amount of the
required minimum distribution (RMD) is calculated by dividing the IRA account balance at the end of the previous year by the life expectancy of the IRA owner, or the joint and survivor life expectancy of the IRA owner and a designated beneficiary.
(8) The amount of the
required minimum distribution is determined based upon the IRA owner's life expectancy.
Volatile market conditions in 2008 precipitated legislation that suspends
required minimum distribution (RMD) withdrawals for 2009, with no penalty for individuals aged 701/z and older.
To begin with, even at age 71, there is no
required minimum distribution on the tax-free (Roth) account, so overall RMDs go down.
The distribution also counts towards the
required minimum distribution.