Retire On Your Terms

Checklist: Required Minimum Retirement Distribution

Required minimum distribution (RMD) is a required withdrawal for tax-deferred accounts once an investor has reached 70 ½ years of age or has retired, whichever is later. It must be taken by December 31, and failure to withdraw the required minimum distribution carries a penalty of 50% of the RMD. Use this checklist to help figure out an individual’s RMD for the year.

  • Did you turn 70 ½ during the current year?
  • Are you retired? (if you are not retired you do not have to take RMD)
  • Do you own tax-deferred savings accounts? (annuities, 401(k), 403(b), 457(b), Roth 401(k), IRA)
  • Have you calculated the balance of each tax-deferred account as of December 31 of last year?
  • If any of these accounts include additional benefits, i.e. living benefits, withdrawal benefits, death benefits, etc., the present-value of these benefits must be included in your account balance. See your bank and/or financial institution for these values.
  • Use the tables in IRS Publication 590 to calculate your life expectancy factor.

Life Expectance Factor (see IRS Publication 590)

  • If you are unmarried, then use Uniform Lifetime Table.
  • If your spouse is the beneficiary and is not more than 10 years younger, then use the Uniform Lifetime Table.
  • If your spouse is not the beneficiary, then use the Uniform Lifetime Table.
  • If the beneficiary is your spouse who is more than 10 years younger, then use the Joint and Last Survivor Table.

Calculating RMD

  • Divide last year’s ending account balance (including additional benefits) by your life expectancy factor.

Checklist: Required Minimum Distributions

Required Minimum Distribution Checklist