What Does Required Minimum Distribution Mean In Estate Planning?
The amount you are required to withdraw each year from a tax deferred retirement plan after you have reached the required beginning date (RBD). This amount is determined across all of these accounts and is calculated by dividing the year-end value of all of these accounts by a life expectancy divisor provided by the IRS. Although calculated across all of these accounts, you can take your total RMD from one account.
Example Of Required Minimum Distribution In Regards To Estate Planning
My grandma forgot to take her required minimum distribution last year and had to pay a penalty.