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3rd Quarter 2018

Retiree Corner: When and How to Take RMDs

Whan and how to take RMDsAfter saving for retirement for years, you finally have to start taking the money out. You need to start taking required minimum distributions (RMDs) from your 457 plan, any 401 plans, and traditional IRAs after you turn age 70½. You usually have to take your RMD by Dec. 31 each year, but you have until April 1 of the year after turning 70½ to take your first RMD. If you delay that first withdrawal, however, you'll have to take two RMDs in one year.

The required amount is based on your account balance at the end of the previous year and a life expectancy factor based on your age (see IRS Publication 590-B at www.irs.gov). You need to calculate your RMD and withdraw the required amount separately from each 457. If you have a few IRAs, you can add up the balance in all of your traditional IRAs, calculate your RMD, and then withdraw the required amount from any of your traditional IRAs (Roth IRAs don't have RMDs). If you're still working at 70½, you may not need to take RMDs from your current employer's 457 plan until you retire, but you still need to take RMDs from former employers' plans and traditional IRAs.

You can sign up to have ICMA-RC distribute your RMD automatically each year, or pay out a portion of your RMD each month, each quarter, or semi-annually. Learn more about RMDs at www.icmarc.org/rmd.

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