Required Minimum Distributions

What are required minimum distributions?

Required minimum distributions (RMDs) are minimum amounts you must withdraw from your retirement accounts each year. The IRS requires that you begin taking these distributions when you turn age 70½.

RMDs are required for various retirement accounts, including traditional IRAs, SEP-IRAs, SIMPLE IRAs, and workplace retirement plans. Roth IRAs are not subject to RMDs.

RMD dates to know RMD payments must begin in the year you reach age 70½. You have until April 1 of the next year to take your first distribution. Distributions thereafter must be taken by December 31 each year.

Calculating your RMD RMDs are calculated using the year-end balance for all of your individual IRAs as of the prior year, divided by a life expectancy factor published by the IRS. To get an idea of your RMD, take a look at our RMD Worksheet (pdf). You can also contact us to help calculate your RMD amount. Note that due to the technical nature of RMD calculations and the potential penalties for miscalculations, you may want to consult a tax advisor for guidance.

Withdrawal options when you have multiple IRAs RMDs must be calculated for each individual IRA you own, but you may add these amounts together and take your distribution from a single account. You can always withdraw more than the required amount in a given year, but any excess amount cannot be credited toward future distributions.

RMD tax rates Distributions from IRAs are included in your gross income and are taxed at your normal tax rate. You may elect to have taxes withheld from your distribution as a prepayment for any IRS tax liability you may owe.

RMD penalties

If you don't take a minimum distribution or don't take the entire required amount, there may be an excess accumulation penalty of 50% on the amount not distributed. You will be expected to withdraw the required amount from your IRA in addition to paying the penalty.

Please note that, on an annual basis, we report to the IRS if a distribution is required for any IRA accounts.

Do you need to take an RMD on your account? If so, please contact us:

  • By phone: If your account options allow for it, you may transact over the phone at 1-800-359-3379.
  • By mail: Complete an IRA Distribution Request form (pdf) in order to:
    • Request a one-time distribution be sent to you by mail, be deposited into your bank account, or be transferred to another account.
    • Request a periodic distribution for your RMD that will be taken automatically each year.
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