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Question:


What is a “minimum distribution” from a retirement account, and how is it calculated?
-MLEldridge


Answer:


You’ve led a financially virtuous life, putting money aside year after year in an individual retirement account or an employer-sponsored plan like a 401(k). Good for you, but the IRS evidently doesn’t want you to overdo it. Once you turn 70 years and six months the clock starts ticking, and distributions from either type of plan soon become required.
 
Distributions must begin by April 1 in the calendar year after you turn 70 years and six months, unless you’re still on the job and participate in your employer’s plan. Then distributions must start by April 1 in the year after you retire. 
 
How much you must take each year depends on the balance in your account on the previous December 31 and on your age and gender (which determine life expectancy) and whether you are married and how old your spouse is. To help calculate your minimum distribution, consult the life expectancy table in Appendix C of IRS Publication 590 that corresponds to your circumstances.
-Conrad de Aenlle



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