Required Minimum Distributions (RMD)

Understanding more about your Required Minimum Distributions

The IRS rules state that as of age 72 you must begin taking a Required Minimum Distribution (RMD) from your retirement plan or possibly incur severe penalties on the amount you should have withdrawn.

To request your RMD, contact Envoy’s service 
Use this calculator to determine your Required Minimum Distribution (RMD)

Frequently Asked Questions

What is a Required Minimum Distribution?

A Required Minimum Distribution (RMD) is a distribution made from an IRA or employer-sponsored retirement plan in order to satisfy IRS regulations. The objective of RMDs is to begin to pay income tax on the money that has accumulated tax-deferred in your IRA or employer’s retirement plan.

When do I have to take my RMD?

Generally, RMDs have to be taken on or before December 31 of each year beginning with the year you attain the age of 72. If the account holder is 70 ½ years old before December 31, 2019 or 72 years old after December 31, 2019, then the RMD must be taken.

The IRS does provide a grace period for the first year of your RMD, therefore distributions can be taken as late as April 1 of the year following the year you reach 72. For example, if you turn 72 in 2021, you have until April 1, the following year (2022) to take your RMD for the first time. Every year following 2022, you would be required to take your RMD by December 31 of that year. 

In the 2020 tax year, all RMDs have been waived. This does not affect those who will have to begin by April 1, 2021, nor those who would typically need to take their RMD by December 31, 2021.

(Some exceptions may apply to those RMDs from 403(b) contributions prior to 1987.)

What happens if I don’t take my RMD by the deadline?

Missing the RMD deadline, or withdrawing an insufficient amount, will cause you to incur an IRS penalty. The penalty is 50% of the amount that should have been withdrawn.

I am 72 years old, but still working and participating in my employer’s qualified retirement plan. Do I need to take the required minimum distributions from this plan?

You are not required to take an RMD from this plan until you retire. However, if you are a participant in the SEP-IRA or SIMPLE IRA, you must begin RMDs at age 72, regardless of your employment status.

I am 73 years old, still working but moving to a part-time position. Do I have to take an RMD from my 401(k)/403(b) plan?

No, the number of hours worked is not a factor. To show that you are still employed and not retired, you must receive a W-2 showing earned income from the employer sponsoring the plan within the same year that your RMD would be calculated.

What if I have multiple IRAs and 403(b)s?

You must calculate the required minimum distribution for each IRA and 403(b) separately. However, you may withdraw the aggregate amount of your RMD from one IRA or one 403(b) account. You would calculate all your IRAs together and all your 403(b)s together. You cannot take one amount across the two types of accounts. 

Is there any way to avoid taking an RMD from my IRA?

Yes. You can roll the IRA over to a current employer’s 401(K) or 403(b) account (if still employed).