What Is a Required Minimum Distribution?

This week, Craig Siminski, of CMS Retirement Income Planning, shares an article discussing the annual amount that must be withdrawn from a qualified retirement plan/account:

A required minimum distribution (RMD) is the annual amount that must be withdrawn from a traditional IRA or a qualified retirement plan (such as a 401(k), 403(b), and self-employed plans) after the account owner reaches the age of 72. The last date allowed for the first withdrawal is April 1 following the year in which the owner reaches age 72.

Some employer plans may allow still-employed account owners to delay distributions until they stop working, even if they are older than 72.

RMDs are designed to ensure that owners of tax-deferred retirement accounts do not defer taxes on their retirement accounts indefinitely. You are allowed to begin taking penalty-free distributions from tax-deferred retirement accounts after age 59½, but you must begin taking them after reaching age 72.

If you delay your first distribution to April 1 following the year in which you turn 72, you must…

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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 24 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.

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