Asked by Peter  |  Submitted April 20, 2017

What is Required Minimum Distribution?

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  Answers  |  1

April 20, 2017

RMDs refer to required minimum distributions on tax-deferred retirement accounts. Under current IRS rules, you must take distributions when you are 70 1/2 years old, whether you want to or not. Based on IRS tables, at 70 1/2 years the divisor is 27.4, equaling a 3.6% withdrawal of the December 31 account balance in the preceding year.

You can take it in 1 year, or take 2 distributions the following year. There is a 50% penalty for not taking RMD.

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