Required Minimum Distributions

Required Minimum Distributions are minimum amounts that the government requires most retirement account holders to withdraw annually, starting at a specific age. They apply to tax-deferred retirement accounts and are required to ensure that people eventually pay taxes on money that has been growing with tax deferral.

The following types of retirement accounts are subject to required minimum distributions:

• Traditional IRAs
• SEP IRAs
• SIMPLE IRAs
• 401(k), 403(b), and 457(b) plans (including Roth 401(k)s)
• Inherited IRAs (both traditional and Roth)
  
  

At what age must you begin distributions?

Distributions must begin April 1 of the year after they turn:

Subsequent distributions must be taken by the end of each year.

Taxation

Distributions from the aforementioned account types are generally taxed as ordinary income.

Roth IRAs do not require minimum distributions during the account holder’s lifetime, as they have been funded with money that has already been previously taxed.

-Zac