These frequently asked questions and answers provide general
information and should not be cited as any type of legal authority. They
provide the user with information responsive to general inquiries. Because
these answers do not apply to every situation, yours may require additional
Required Minimum Distributions?
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 ½ 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 business sponsoring the retirement plan, the
RMDs must begin once the account holder is age 70 ½, regardless of whether he
or she is retired.
Retirement plan participants and IRA owners are responsible for taking
the correct amount of RMDs on time every year from their accounts, and they
face stiff penalties for failure to take RMDs.
When a retirement plan account owner or IRA owner dies before RMDs
have begun, different RMD rules apply to the beneficiary of the account or IRA.
Generally, the entire amount of the owner’s benefit must be distributed to the
beneficiary who is an individual either (1) within 5 years of the owner’s
death, or (2) over the life of the beneficiary starting no later than one year
following the owner’s death. See Publication 590, Individual Retirement
Arrangements (IRAs), for complete details on when beneficiaries must start
What types of retirement plans
require minimum distributions?
The RMD rules apply to all employer sponsored retirement plans,
including profit-sharing plans, 401(k) plans, 403(b) plans, and 457(b) plans.
The RMD rules also apply to traditional IRAs and IRA-based plans such as SEPs,
SARSEPs, and SIMPLE IRAs.
The RMD rules also apply to Roth 401(k) accounts. However, the RMD
rules do not apply to Roth IRAs while the owner is alive.
When must I receive my required minimum
distribution from my IRA?
You must take your first required minimum distribution for the year in
which you turn age 70½. However, the first payment can be delayed until April 1
of the year following the year in which you turn 70½. For all subsequent years,
including the year in which you were paid the first RMD by April 1, you must
take the RMD by December 31 of the year.
A different deadline may apply
to RMDs from pre-1987 contributions to a 403(b) plan (see FAQ 5 below).
How is the
amount of the required minimum distribution calculated?
Generally, a RMD is calculated for each account by dividing the prior
December 31 balance of that IRA or retirement plan account by a life expectancy
factor that IRS publishes in Tables in Publication 590, Individual Retirement
Arrangements (IRAs). Use the:
- Joint and Last
Survivor Table if your sole beneficiary of the account is your spouse and your
spouse is more than 10 years younger than you;
- Uniform Lifetime
Table if your spouse is not your sole beneficiary or your spouse is not more
than 10 years younger; and
- Single Life
Expectancy Table if you are a beneficiary of an account.
the required minimum distribution requirements for pre-1987 contributions to a
If the 403(b) plan (including any 403(b) plan that received pre-1987
amounts in a direct transfer that complies with Treas. Reg. Section
- has separately
accounted and kept records for pre-1987 amounts, and
- is for the primary
purpose of providing retirement benefits (see the incidental benefit rules in
Treas. Reg. Section 1.401-1(b)(1)(I)), then the pre-1987 amounts (excluding any
earnings or gains on such amounts):
- are not subject to
the age 70½ RMD rules of IRC Section 401(a)(9),
- are not used in
calculating age 70½ RMDs from the 403(b) plan, and
- don't need to be
distributed from the plan until December 31 of the year in which a participant
turns age 75 or, if later, April 1 of the calendar year immediately following
the calendar year in which the participant retires.
If the plan includes both pre-1987 and post 1987 amounts, for
distributions of any amounts in excess of the age 70½ RMDs, the excess is
considered to be from the pre-1987 amounts.
If records are not kept for pre-1987 amounts, the entire account balance
is subject to the age 70½ RMD rules of IRC section 401(a)(9).
account owner just take a RMD from one account instead of separately from each
An IRA owner must calculate the RMD separately for each IRA that he or
she owns, but can withdraw the total amount from one or more of the IRAs.
Similarly, a 403(b) contract owner must calculate the RMD separately for each
403(b) contract that he or she owns, but can take the total amount from one or more
of the 403(b) contracts.
However, RMDs required from other types of retirement plans, such as
401(k) and 457(b) plans have to be taken separately from each of those plan
calculates the amount of the RMD?
Although the IRA custodian or retirement plan administrator may
calculate the RMD, the IRA or retirement plan account owner is ultimately
responsible for calculating the amount of the RMD.
account owner withdraw more than the RMD?
happens if a person does not take a RMD by the required deadline?
If an account owner fails to withdraw a RMD, fails to withdraw the full
amount of the RMD, or fails to withdraw the RMD by the applicable deadline, the
amount not withdrawn is taxed at 50%. The account owner should file Form 5329,
Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored
Accounts, with his or her federal tax return for the year in which the full
amount of the RMD was not taken.
penalty for not taking the full RMD be waived?
Yes, the penalty may be waived if the account owner establishes that
the shortfall in distributions was due to reasonable error and that reasonable
steps are being taken to remedy the shortfall. In order to qualify for this
relief, you must file Form 5329 and attach a letter of explanation. See
theinstructions to Form 5329
distribution in excess of the RMD for one year be applied to the RMD for a
The account owner is taxed at his or her income tax rate on the amount
of the withdrawn RMD. However, to the extent the RMD is a return of basis or is
a qualified distribution from a Roth IRA , it is tax free.
amounts be rolled over into another tax-deferred account?
Please refer to Publication 590 , Individual Retirement Arrangements
(IRAs), for additional information.
employer required to make plan contributions for an employee who has turned 70½
and is receiving required minimum distributions?
Yes, you must continue contributions for an employee, even if they are
receiving RMDs. You must also give the employee the option to continue making
salary deferrals, if the plan permits them. Otherwise, you will fail to follow
the plan's terms, causing your plan to lose its qualified status. You may
correct this failure through the Employee Plans Compliance Resolution System
Contributions Affect RMDs
When you calculate an employee’s RMD, consider any contributions that
you make for that employee. For defined contribution plans, calculate the RMD
for an employee by dividing his or her prior December 31 account balance by a
life expectancy factor in the applicable table contained in Appendix C of Pub.
590. A defined benefit plan generally must make RMDs by distributing the
participant’s entire interest as calculated by the plan’s formula in periodic
annuity payments for:
- the participant’s
- the joint lives of
the participant and beneficiary, or
- a “period certain”
(see Treas. Reg. §1.401(a)(9)-6, A-3).