---
title: Retirement Plans Required Distributions
description: Required Minimum Distributions From Retirement Plans
image: https://info.ongandcompany.com/hubfs/retirement%20savings.jpg
---

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# Retirement Plans Required Distributions

[Richard Ong](https://info.ongandcompany.com/blog/author/richard-ong) / December 30, 2017 /

[Retirement Savings](https://info.ongandcompany.com/blog/topic/retirement-savings)

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Once you've retired, you may think you have it made, especially if you've managed to save enough money through IRAs and employer-sponsored plans like 401(k)s. But you still have to meet the tax obligations for required minimum distributions (RMDs).

Essentially, you must take a certain amount of money every year from IRAs and qualified plans after reaching age 70½, whether you want to or not. Otherwise, the IRS can assess a penalty equal to 50 percent of the amount that should have been withdrawn, on top of the regular tax that is due. Keeping that in mind, here are three little-known rules relating to RMDs:

**1. Starting date:** Technically, RMDs don't have to begin until April 1 of the year following the year in which you turn 70½. For example, if you turned 70½ this year on July 15, you don't have to take an RMD for the 2017 tax year until April 1, 2018. However, RMDs are due by Dec. 31 of each subsequent year (after you turn 70½), so you would have to make a "double payment" in 2018 if you don't take an RMD in 2017.

**2. Amount of RMDs:** The amount of the RMD is based on your account balance in the prior tax year and special life expectancy tables provided by the IRS. In other words, RMDs for 2017 are generally based on account values as of Dec. 31, 2016, and your life expectancy. The financial institution handling your account will usually do the calculation for you if you ask.

**3. "Still working" exception:** If you're still working for the employer providing a 401(k) where you're required to take an RMD, you can skip this obligation if you don't own 5 percent or more of the company. But you still must take RMDs from any other employer plan where you have assets, and from all of your IRAs.

These are just three factors that may affect RMDs this year. The stakes are high, so make sure you comply with all the rules. Call us if you have questions about tax obligations related to your RMDs.

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