2018 Winter Newsletter-AT.ai

Connection

Winter 2018

Required Minimum Distribution

Do you have questions on when a Required Minimum Distribution (RMD) needs to be processed? Don’t worry. You’re not alone. Under Internal Revenue Service (IRS) regulations, a participant must begin taking RMDs no later than April 1 following the calendar year in which he/she reaches age 70½. This is known as the required beginning date. If a participant is a 5 percent owner or has terminated employment, then the first RMD must be taken by this date.

Participants must take their second RMD by

December 31 of the calendar year following the year they attain age 70½. For example, if the first RMD is due April 1, 2018, and the participant turned 70½ in 2017, he/she must take the second RMD no later than December 31, 2018. Note: participants can take the first RMD in the year prior. All subsequent distributions must be taken by December 31 of each year. If a participant is age 70½, not a 5 percent owner, and still working for the company sponsored retirement plan, he/she may defer the RMD until he/she terminates from the company. The RMD would need to be processed by April 1 the year following termination, and the second RMD would need to be processed by December 31 of the calendar year that employment was terminated.

If a participant has multiple retirement accounts, we suggest contacting a tax advisor.

As a Reminder... For 2018, the maximum contribution limit is $18,500, plus an additional $6,000 for those over the age of 50.

895 Main Street | Dubuque, IA 52001 | 800.548.2995 | www.americantrustretirement.com

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