What is RMD?

When you have qualified money, retirement accounts, IRA, 401k, or 403b IRS Guidelines require they begin taking minimum distributions from these funds at age 70 1/2. Required Minimum Distribution (or RMD) is designed to help you calculate the proper minimum distribution based on life expectancy. When Do They Start? Tax laws require you to begin receiving minimum distributions from you qualified money by April 1 of the year after you reach age 70 1/2. For example, if 70 1/2 on May 1, 2005, you initial distribution must be taken by April 1, 2006 and be based on the Contract Value as of December 31 of that year. Future distributions must be taken by December 31 of each year. Changes With Minimum Distribution The U.S. Treasury Department changed RMD Guidelines effective View the rest of this article