Required Minimum Distributions

RMD stands for Required Minimum Distributions. It is the minimum amount of money that must be withdrawn annually from an employer-sponsored retirement plan, traditional IRA, SEP, or SIMPLE individual retirement account (IRA) by owners and qualified retirement plan participants of retirement age 123. The minimum distribution rules apply to original account holders and their beneficiaries in these types of plans: traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k) plans, 403(b) plans, 457(b) plans, profit-sharing plans, other defined contribution plans, and Roth IRA beneficiaries.

The required minimum distribution for any year is the account balance as of the end of the immediately preceding calendar year divided by a distribution period from the IRS’s “Uniform Lifetime Table.” Use a different table if the sole beneficiary is the owner’s spouse who is ten or more years younger than the owner. The following can help determine the payout periods and the amount of your required distribution:

• Tables to calculate the RMD during the participant or IRA owner’s life:Uniform Lifetime Table – for all unmarried IRA owners calculating their own withdrawals, married owners whose spouses aren’t more than 10 years younger, and married owners whose spouses aren’t the sole beneficiaries of their IRAsTable I (Single Life Expectancy) is used for beneficiaries who are not the spouse of the IRA ownerTable II (Joint Life and Last Survivor Expectancy) is used for owners whose spouses are more than 10 years younger and are the IRA’s sole beneficiaries
• Inherited IRAs - if your IRA or retirement plan account was inherited from the original owner, see “required minimum distributions after the account owner dies,” below.

The required beginning date for your first RMD is April 1 of the year following the calendar year in which you reach age 72 (73 if you reach age 72 after Dec. 31, 2022) 1. Roth IRAs do not require withdrawals until after the death of the owner; however, beneficiaries of a Roth IRA are subject to the RMD rules. Designated Roth accounts in a 401(k) or 403(b) plan are subject to the RMD rules for 2022 and 2023. However, for 2024 and later years, RMDs are no longer required from designated Roth accounts. 2023 RMDs due by April 1, 2024, are still required 1.

The Uniform Lifetime Table is a single table that provides life expectancy factors for each age from 72 to 120 and older. You can use the table to calculate your RMD by dividing your account balance as of December 31 of the previous year by the life expectancy factor corresponding to your age . The IRS provides a worksheet to help you calculate your RMD.

If the sole beneficiary of an IRA is the owner’s spouse who is more than 10 years younger, then the Joint Life and Last Survivor Expectancy Table should be used instead of the Uniform Lifetime Table 12. The Joint Life and Last Survivor Expectancy Table provides longer life expectancies than the Uniform Lifetime Table, which results in lower RMDs. The table is used to calculate the RMD for the account owner’s lifetime and the joint life and last survivor expectancy of the owner and the spouse. The table provides life expectancy factors for each age from 0 to 120 and older. You can use the table to calculate your RMD by dividing your account balance as of December 31 of the previous year by the life expectancy factor corresponding to your age and your spouse’s age. The IRS provides a worksheet to help you calculate your RMD.

If a person dies after his Required Beginning Date, the 10-year rule or life expectancy rule may apply .

If a person dies before his Required Beginning Date, and the beneficiary is not a Designated Beneficiary, the 5-Year Rule Applies. This applies to many estates, trusts, and charities.

If the beneficiary is? Designated Beneficiary , but not an Eligible Designated Beneficiary, the 10-Year Rule Applies.?

The Eligible Designated Beneficiary is a classification for individuals who inherit a retirement account. The following are the categories of individuals considered Eligible Designated Beneficiaries:

• Surviving spouse
• Minor child of the account owner
• Disabled or chronically ill individual
• Individual who is not more than 10 years younger than the IRA owner or plan participant
• Any individual who is not included in the above categories but is designated as a beneficiary by the account owner and meets certain requirements.

Eligible Designated Beneficiaries have more flexibility when withdrawing funds from their inherited accounts than other beneficiaries. For example, surviving spouses can roll over the inherited account into their own IRA, while non-spouse beneficiaries must take distributions based on their own life expectancy. account?ccount holder occurred after 2019account holder occurred after 2019.