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IRA Required Minimum Distribution Kit

November 17, 2015

Lots of people call me that need to start their IRA required minimum distributions (“RMD.”)  I also get calls by those that already started, have multiple accounts and from people that want to know if there are instructions they can leave to their beneficiaries.  Here is a “kit” you can use to calculate the amount and timing of your first payment and two letters you can also use.  Reference this as a guide and double-check everything with your financial advisor.

IRA Required Minimum Distribution Starting Date Table

Sample 1 Sample 2 Fill in your #
Date of birth June 1, 1945 Dec 1, 1945
Date attained age 70 June 1, 2015 Dec 1, 2015
Date attained age 70½ Dec 1, 2015 June 1, 2016
Required beginning date April 1, 2016 April 1, 2017
Attained age during the calendar year age 70 ½  was attained (used for life expectancy purposes) Age 70 Age 71
Life expectancy to use if first distribution is made in year attained age 70 1/2 27.4 26.5
Life expectancy to use if first distribution is made by April 1 in year after attained age 70 1/2 26.5 25.6
IRA valuation date for first payment if payment made in year attained age 70 1/2 Dec 31, 2014 Dec 31, 2015
IRA valuation date first payment if payment made by Apr 1 in year after attained age 70 1/2 Dec 31, 2015 Dec 31, 2016
Date second payment must be made by Second payment must be made by December 31 of the year after IRA owner attained age 70 ½ regardless of which choice is made for first distribution.  So it is  possible for two RMDs in that year
Thereafter one payment must be made each calendar year

Uniform Distribution Table

(Based upon the age of the IRA owner on their birthday in the year of the distribution)

(This table is not applicable where a spouse more than ten years younger is the designated beneficiary.)

Applicable
Age
 

Divisor

  Applicable
Age
 

Divisor

70 27.4 93 9.6
71 26.5 94 9.1
72 25.6 95 8.6
73 24.7 96 8.1
74 23.8 97 7.6
75 22.9 98 7.1
76 22.0 99 6.7
77 21.2 100 6.3
78 20.3 101 5.9
79 19.5 102 5.5
80 18.7 103 5.2
81 17.9 104 4.9
82 17.1 105 4.5
83 16.3 106 4.2
84 15.5 107 3.9
85 14.8 108 3.7
86 14.1 109 3.4
87 13.4 110 3.1
88 12.7 111 2.9
89 12.0 112 2.6
90 11.4 113 2.4
91 10.8 114 2.1
92 10.2 115 and older 1.9

Sample Letter When There is Multiple IRA Accounts and Required Minimum Distribution Will Come Out of Another Account

Insert name and address of IRA Owner at top of letter

Account #____________________

Date____________________

Name of IRA Custodian_____________________________

Address_________________________________________

City_____________________ State________ Zip________

Dear Sir or Madam:

Thank you for advising me of my required minimum distribution amount for the year _______.

Please be advised that I will take or have taken distributions from my other retirement accounts to satisfy the minimum distribution requirement.

Cordially,

________________________

 

Sample Letter to IRA Beneficiaries

Insert name and address of IRA Owner at top of letter

Warning letter to seek professional assistance

Dear________________________________,

You have been named as a beneficiary of my IRA.

You should seek personal guidance BEFORE you request

or accept any distribution from the account.

You should not change the names on the account; and should not take, deposit or receive ANY distributions before getting advice.  Doing the wrong thing could make the entire IRA taxable in the year of my death instead of allowing the distributions to be taxed over either your life expectancy or my remaining life expectancy, depending on when I died.  Also, receiving any distribution can ruin your chances to have tax planning done for you or your family such as making a qualified disclaimer and considering the IRA for asset protection.

I hope you make the most of this inheritance.

Good luck!

With love,

________________________________________

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