First Year RMD From IRA Account
Just a clarification please …
On a client’s first year RMD… The way it works is, the 70 1/2 bithdate could [b]happen anytime [/b]within the year and that client has the option to defer that ‘First Year RMD’ until April 1st of the following calendar ??
Permalink Submitted by Alan Spross on Mon, 2011-12-12 20:17
That is correct.
The significance of when the half birthdate falls is that if it falls in the first half of the year the RMD divisor is 26.5 and if it falls in July or later the divisor is 27.4.
If the first year RMD is deferred it will also cause the second year RMD to be larger by almost 4% due to the larger year end balance from not taking out the first RMD.
Permalink Submitted by Gregg Guiol on Mon, 2011-12-12 20:30
Alan – As always, your responses are much appreciated !!!