The letters stand for “Required Minimum Distribution” and it refers to the minimum distribution that must be taken from a retirement account each year. With the first of the baby boomers (those born in 1946 through 1964) reaching age 70 ½ this year (the age when most people are required to begin taking their RMD), undoubtedly many will have questions regarding when and how much they must withdraw. Adding to the complexity are the various exceptions and deadlines regarding the distributions. Even the leading expert on retirement accounts, Natalie Choate who turned 70 ½ last year was surprised at how complicated the process was for her.
A recent article in The Wall Street Journal (“Everything You Need to Know About Required Distributions”) is a great resource from anyone who has questions about their RMD. It answers many of the common questions people including how to calculate your RMD or the 50% penalty if you fail to take your RMD. If you have questions about your mandatory distributions from your retirement account, here is a link to the article: http://on.wsj.com/2jUlQD9