required minimum distribution
Birthday 7/20/1940 – will have to take distribution this year. Have been withdrawing funds for last few years. I will withdraw the min required this year.
Question: Must I make a withdrawal by April 1 2011? Also when I use rmd calculator with a conservative estimated rate of return the balance of the account
will never approach zero (0). Doesn’t the government expect (require) that the balance reach zero?
Dennis
Permalink Submitted by Alan Spross on Sun, 2011-03-06 04:04
2011 is your first distribution year, but for this first year only, you can delay the distribution until 4/1/2012 and take no distribution in 2011. If you do that, you will also have to take your 2012 RMD in 2012.
Any distribution you take this year is automatically applied against your 2011 RMD.
The uniform table is designed to make your IRA last longer than the average life expectancy, in part because it is assumes a joint life expectancy with a spouse that is 10 years younger than the IRA owner. Your IRA would normally not be totally liquidated by RMDs since the divisor minimum is 1.9 reached when you are 115. At age 92, your RMD is about 10% of the prior year end balance. Around that time your RMD would exceed the return you would get and would then reduce rapidly. Although it would not be totally exhausted, the balance and the resulting RMDs would get smaller and smaller after age 90.
Permalink Submitted by Dennis Healey on Sun, 2011-03-06 15:13
Alan,
As always, thank you for your quick and informative response.
Dennis