Understanding the RMD Rules
The IRS Required Minimum Distribution (RMD) rules can be a bit confusing and failing to satisfy your annual RMD can be expensive, up to a 50% excise tax penalty. The following information is provided to help account holders understand these complicated rules. As every individual’s situation is unique, we always advise contacting a qualified tax advisor to ensure that you satisfy your annual RMD requirements.
Basically, the IRS requires that owners of tax-deferred retirement accounts begin withdrawing (and paying taxes on) minimum amounts each year upon attaining the age of 72. Beneficiaries of Inherited IRAs must usually begin taking RMDs in the year following the year of the account holder’s death (see below). There is an exception for the original account holder of a ROTH IRA; no RMDs need to be taken from a ROTH IRA during the original account holder’s lifetime.
Read below for situation-specific RMD information.
Traditional IRAs
| Turning 72 This Year | Turned 72 Before This Year |
| If you will have turned age 72 by the end of the current calendar year, you are required to begin taking RMDs this year. Click the button below for more information on determining your first year RMD. | You should have already taken your first RMD. You will need to continue withdrawing your RMDs each year, for as long as your account exists. Click the button below for more information on determining your RMDs for subsequent years. |
| First RMD | Subsequent RMDs |
ROTH IRAs
There are no minimum distribution requirements during the lifetime of the original accountholder of a ROTH IRA. Beneficiaries will be required to begin minimum distributions, see below.
Inherited IRAs
(Traditional and ROTH) Click the following link for additional information for beneficiaries.