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Required Minimum Distribution (RMD)

Required minimum distributions (RMDs) generally are minimum amounts that a retirement plan account owner must withdraw annually starting with the year that he or she reaches 70 1/2 years of age, or if later, the year in which he or she retires. However, if the retirement plan account is an IRA or the account owner is a 5% owner of the businses sponsoring the retirement plan, the RMDs must begin once the account holder is age 70 1/2, regardless of whether his or she is retired. If The RMD is not taken in the correct amount or timely, a 50% excise tax will be assessed on the amount of the under payment out of the retirement account.

Answers to Frequently Asked Questions

  • Q1. At what age must required minimum distributions be taken?

    Generally, federal regulations require participants in 401(k), profit sharing, money purchase and other retirement plans to begin required minimum distributions (RMDs) in the calendar year they reach age 70½.  Once begun, these payments must be taken every year thereafter. The RMD amount is based on your life expectancy as further explained in Q3 and Q4.

    Some plans allow active participants who have 5% or less ownership* to delay their initial RMD until they terminate employment. Check with your Plan Administrator to see if your plan offers this option.  If allowed and you choose to delay your RMD, you are locked into that choice and you may not take any RMD payment before you terminate employment.

    *If you are more than a 5% owner, you must begin receiving RMDs for the calendar year you turn 70½, even if you are still an active participant in the plan. 

  • Q2. What is the deadline for taking my RMD?

    If you are required to begin taking RMDs in 2018, you must receive your first year’s distribution by April 1, 2019. This is your “required beginning date.” However, you may choose to take all or part of the RMD any time between January 1, 2018 and April 1, 2019.

    RMD payments for calendar year 2018 and each year thereafter must be taken by December 31 of each year. For example, your 2018 RMD must be taken by December 31, 2018. Consequently, if you delay withdrawing your 2018 RMD until 2019, you will have to receive—and must include in income—both the 2018 and the 2019 RMD amounts in tax year 2019.

  • Q3. How is my RMD determined?
    Your RMD for the current tax year is determined by dividing your December 31 balance from the previous calendar year by the life expectancy factor derived from the Uniform Lifetime Table (see Exhibit A). For example, if you turn age 72 in 2018, the Uniform Lifetime Table lists your life expectancy as 25.6 years. To determine your 2018 RMD, divide your December 31, 2017 account balance by 25.6.
  • Q4. Does who I name as my beneficiary affect my RMD calculation?

    If your spouse is designated as your sole beneficiary and is more than 10 years younger than you, the Joint Life Expectancy Table will be used to calculate your RMD. Using this table may result in a lower RMD than when the Uniform Lifetime Table† is used. If you have other questions about RMD beneficiary designations, consult your tax or legal advisor.

    †You can review the Joint Life Expectancy Table in IRS Publication 590, Appendix B, page 45, online at

  • Q5. How is federal income tax withholding calculated on my RMD?

    Federal income tax will be withheld according to the participant’s instructions; applicable state tax will also be withheld, if applicable. Please note: if you are eligible to take a distribution greater than the calculated RMD amount, 20% federal tax withholding (and any applicable state tax) must be applied to the amount in excess of the RMD. This 20% federal tax withholding on the additional amount is mandatory and may not be waived.

  • Q6. What happens if I ask for less than the RMD amount or I miss the required deadline?

    If you take less than the RMD amount or miss the deadline for distribution, the IRS may assess a penalty tax equal to 50% of the RMD amount that was not distributed from the plan by the required date. Consult your tax or legal advisor for information on filing the required IRS Form 5329 to pay the penalty.

  • Q7. How will a distribution during the year affect my RMD?

    Any distributions from the plan during the year will be applied to your RMD payment. For example, if your RMD is $5,000.00, and you receive $2,000.00 in distributions during the year, you will be required to take an additional $3,000.00.

  • Q8. Am I required to take distributions if I am a beneficiary?

    Beneficiaries are required to take distributions from an inherited retirement plan. The timing and calculation of these distributions depend on the age of the participant at the time of death, the beneficiary’s relationship to the decedent, and the requirements under the plan. The age of the beneficiary does not determine if a payment is required but may affect the calculation of the required payment. Beneficiaries must contact the plan sponsor to discuss payment requirements and choose a payment option. Once the payment is determined, a Death Distribution Request Form is required each year to request the distribution. If a beneficiary fails to receive a required payment timely, the 50% penalty tax on the missed payment will be assessed to the beneficiary.

  • Q9. How do I get more information?

    This life expectancy chart applies in a majority of situations involving a retirement plan account such as a 401(k) retirement plan. Contact your tax advisor to help ensure you're using an accurate and timely chart.

    If the sole beneficiary of the account is a spouse, and the the spouse is more than 10 years younger than the account owner, ask your tax advisor for the Joint and Last Survivor Table.

    More information on RMDs is available on the IRS website.

    Exhibit A - Uniform Lifetime Table for RMD Determinations

    Age Applicable Divisor Age Applicable Divisor Age Applicable Divisor
    70 27.4 86 14.1 102 5.5
    71 26.5 87 13.4 103 5.2
    72 25.6 88 12.7 104 4.9
    73 24.7 89 12.0 105 4.5
    74 23.8 90 11.4 106 4.2
    75 22.9 91 10.8 107 3.9
    76 22.0 92 10.2 108 3.7
    77 21.2 93 9.6 109 3.4
    78 20.3 94 9.1 110 3.1
    79 19.5 95 8.6 111 2.9
    80 18.7 96 8.1 112 2.6
    81 17.9 97 7.6 113 2.4
    82 17.1 98 7.1 114 2.1
    83 16.3 99 6.7 115+ 1.9
    84 15.5 100 6.3
    85 14.8 101 5.9

    This information is intended to be accurate, but it does not constitute legal or accounting advice. Participants are encouraged to speak with a tax advisor.