rmd

Pension Administration and Trust Accounting

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2 Central St
Ipswich, MA 01938
978.356.9004
(f) 978.418.9178

© October 2011
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Required Minimum Distributions (RMD… or MRD)

RMDs Under The New Rules

Generally, Required Minimum Distributions must be started by April 1st of the year following the calendar year in which the account holder attains age 70-1/2. If the account is through the account holder's current employer and the account holder does not own 5% or more of the business, the account holder can wait until April 1st of the year following the calendar year he retires, if later. This is called the account holder's Required Beginning Date. Normally, each year's RMD must be completed by December 31st. Only in the first year can an account holder wait until the following April 1st. (Consider this to be a little break, in case you forget to start taking your distributions in the first year.)

Calculating the Required Minimum Distribution

To determine the current year's RMD, the participant’s account balance as of December 31st of the preceding year is divided by the Distribution Period corresponding to the account holder's attained age in the current year. At least this amount must be withdrawn before December 31st of the current year. RMDs can be taken at any time during the year, in one or more withdrawals, so long as at least the RMD amount is withdrawn by year end. Withdrawals from any Tax Deferred Account can be applied toward the account holders combined total minimum distribution requirement for all such accounts.

The Distribution Period is found in the Uniform Life Expectancy Table below. Each Distribution Period in the table is the joint life expectancy of a person at the indicated age and a second person 10 years younger. The joint life expectancy is the average time before the second of the two people pass away. This is always longer than a single life expectancy. This produces a longer Distribution Period and results in lower RMDs in any given year. Major simplification is achieved by giving everyone the benefit of this longer distribution period. The old rules only allowed use of this longer distribution period if several complex requirements were satisfied. Now, one need only refer to this Table each year to calculate pre-death distributions.

Minimum Distribution “Uniform Life Expectancy Table”

The following table is used for determining the distribution period for lifetime distributions to an account holder.

Age of the Account Holder	Distribution Period
70	27.4
71	26.5
72	25.6
73	24.7
74	23.8
75	22.9
76	22.0
77	21.2
78	20.3
79	19.5
80	18.7
81	17.9
82	17.1
83	16.3
84	15.5
85	14.8
86	14.1
87	13.4
88	12.7
89	12.0
90	11.4
91	10.8
92	10.2
93	9.6
94	9.1
95	8.6
96	8.1
97	7.6
98	7.1
99	6.7
100	6.3
101	5.9
102	5.5
103	5.2
104	4.9
105	4.5
106	4.2
107	3.9
108	3.7
109	3.4
110	3.1
111	2.9
112	2.6
113	2.4
114	2.1
115 and older	1.9

Age of the Account Holder

Distribution Period