3 Replies Latest reply on Jun 14, 2009 11:49 AM by coolbob

    Required Minimum Distribution

      I'd like to get a discussion started on this topic.  It sounds simple, at age 70 1/2 you have to withdraw a certain percentage (value/27.4) but I'm not certain at exactly what point you establish the value.  I think you must start withdrawing in April of the year you turn 70 1/2.  Just thought it would be useful to get some group wisdom on the topic. 
        • Re: Required Minimum Distribution

          Hi Ron,

          You've got it almost right, but you'll get your answers by typing IRA Minimum Distribution in Google.  This will bring up many helpful sites to assist you with withdrawal percentage tables based on your age.  The most important thing is to actually withdraw your money when you're supposed to because the Feds can impose a penalty of up to 50% of what you should have withdrawn if you haven't, so it's very important to do your homework on this.  The percentage you have to withdraw is based on the amount in your IRA account on 12/31 of the year before you withdraw, and is based on your age. 


            • Re: Required Minimum Distribution

              What are the pros and cons of the alternative to RMD, full annuitization? E.g., one might logically annuitize one half of one's accumulation at retirement, but then at 70.5 yrs decide that it made sense to distribute the maximum instead of the minimum. I've seen little or no discussion of this point. Yes, with maximum distribution (if this is the correct term), there would be no remaining balance at death, but the payout while living could be significant, and the participant might have no survivors to worry about.

              Also, to TIAA-CREF, what % of participants at 70.5 in fact choose each option??

                • Re: Required Minimum Distribution
                  I plan to retire in a year and my wife will continue to work. I will get full social security and I will take the "interest only" option until 70 half when I will take the minimum distribution. This will leave a nice estate for the grandkis. Of course I will have to monitor the tax laws on estates which might effect my decision on how to take the distributions. I don't beleive inannuitizing the monies.