RMD and Required Minimum Distributions

RMD is an acronym for “Required Minimum Distribution”. RMD is a fancy term used to describe rules on time and money impacting retirement plans. In other words, how much money must a person take from their retirement product in any given year?

Absolutely, RMD is important from an estate planning perspective too. But, if this is your first time addressing this, let us start slow.

Rules and laws for RMD requirements come in two flavors:

  • Rules during a person’s life, and
  • Rules after a person dies.

Where To Start with RMD?

Really, you already started, so there is that. Now, let us add a second piece. What are the rules?

What makes a rule easier to follow are those that are written down. Rules spoken about as if everybody knew them are unfair. Why? Because most people have never read RMD laws.

Luckily, you are different and took it upon yourself to start reading about Required Minimum Distributions because you want to know how it impacts your retirement, spouse, and adult children. Thus, good for you!

RMD Rules and Laws

Like I mentioned earlier, I like rules that are written down.

Here is a short, but not complete list of laws and rules that apply to RMD requirements:

On the other hand, if you are looking for the specific law when everything started, you can begin your search with P.L. 99-514.

Required Minimum Distribution Laws are Important

From an estate planning perspective, RMD rules and laws are important for our trustees, beneficiaries, spouses, and us as owners of accounts.

Certainly, leaning on professionals makes sense because these rules have long term impacts. On the other hand, these rules are important because they impact our money and tax bill.

For this reason, I believe individuals and families willing to spend time to create a personal RMD roadmap are helping their trustees, spouses, and children in the long run.