taking rmd before reaching 70 and 1/2
Is there a problem with taking RMD before actually turning 70 and 1/2 in October? Would any withdrawal before then not be accepted by IRS as RMD even when required paperwork is filed with company? Also–is it OK to combine totals from all sources when figuring RMD amount, or must RMD be computed for each account? All monies are pretax contributions. No pro-rata necessary as I understand the terminology.
Thanks, mbd
Permalink Submitted by mk foss on Sat, 2010-08-14 22:31
Any withdrawal taken in the year one turns 70-1/2 is considered to be RMD – it doesn’t have to be distributed after attaining the magic age. For example, if your birthday was March 4 and you were turning 70-1/2 on September 4, 2010 – the first RMD would be due before April 1, 2011 but could be claimed as early as January 1, 2010.
As for combining accounts – the regulations indicate that you calculate the RMD from each IRA, then add up the total and you can take the total from any combination of IRA accounts. If you have 403(b) annuities, you can combine them for RMD purposes as well. But if you are the beneficiary of a 401(k), a Keogh or any other qualified plan – each RMD is taken on a plan-by-plan basis.
Permalink Submitted by kathleen Lane on Mon, 2010-08-16 22:25
If the account owner elects to take his first RMD April 1, 2011….when must he take his second RMD?
Does he need to take the second RMD in 2011? Or if you wait to take the first RMD in 2011. is the second RMD required to be done in 2012?
thanks
Permalink Submitted by mk foss on Mon, 2010-08-16 23:09
The second RMD is always due the year after the owner reaches age 70-1/2. In your example, the second distribution would be due by December 31, 2011. Most people take the first RMD is the year they reach age 70-1/2 because they will have two RMDs in the same year if they wait until the required beginning date (April 1 of the year after they’ve reached age 70-1/2).