Required Minimum Distributions (RMDs)

Determining When Distributions Must Begin

The Internal Revenue Code (IRC) requires account holders to begin receiving distributions from certain accounts no later than their required beginning date. The timing for beginning required minimum distributions depends on the type of account:

IRAs

IRA distributions must begin by April 1st of the year following the year when the IRA account holder reaches age 70½. Subsequent annual distributions must be taken by December 31st each year. If the account holder delays the first distribution until April 1st of the following year, then he/she must still take the second year's distribution by December 31st of that same year. IRA account holders with more than one account may take distributions from each account or aggregate the values and take the distribution from any one account.

Qualified Plans

Participants of qualified plans who own 5% or less of the company are not required to begin taking their RMDs until the later of:

• April 1st of the year following the year they are age 70½ OR
• April 1st of the year after they actually retire.

Participants in employer plans must calculate and distribute the amounts separately for each year. Employees who own 5% or more of the company must begin by April 1st of the year following the year they reached 70½ whether they are or are not retired.