Required Minimum Distribution (rmd)
Definition of "Required minimum distribution (rmd)"
Requirement that an individual must withdraw a minimum sum annually from retirement savings that have accumulated on a tax-deferred basis. This withdrawal must begin by April 1 of the year one reaches age 70 1/2 All deferred tax retirement savings plans (with the exception of the ROTH IRA) are subject to this rule to include the traditional individual RETIREMENT ACCOUNT (IRA), SIMPLIFIED EMPLOYEE PENSION (SEP), SAVINGS INCENTIVE MATCH PLAN FOR EMPLOYEES (SIMPLE PLANS), SECTION 401 (K) PLAN (SALARY REDUCTION PLAN), SECTION 403 (B) PLAN, QUALIFIED PENSION plan, and profit-sharing plan. Withdrawals may be made based on the individual's life expectancy or the joint life expectancy of the individual and the individual's oldest primary beneficiary. The steps for calculating the RMD are:
- determining the total market value of the retirement plan as of December 31 of the year prior to the retirement year.
- determining the life expectancy factor according to the Internal Revenue Service tables.
- dividing the value of the retirement plan by the life expectancy factor.
Popular Insurance Terms
Day-to-day care that a patient (generally older than 65) receives in a nursing facility or in his or her residence following an illness or injury, or in old age, such that the patient can ...
Modest amounts of coverage sold on a debit basis. The face amount is usually less than $1000. ...
Same as term Export-Import Bank: partnership between an agency of the U.S. government and the Foreign Credit Insurance Association (50 commercial insurance companies, both stock and ...
Regulations of the national association of insurance commissioners (naic) that dictate provisions that all individual health insurance policies must contain. All states now require these ...
Indemnification of a school for the loss of tuition, and room and board fees when it is forced to suspend classes because of the occurrence of a peril. ...
Department in an insurance company that prepares policies to be sent to the policyholder, sends the policies, and keeps records of the policies that were sent. ...
Person who has the responsibility for examining the risk to determine whether or not to insure it. ...
Particular type of inland marine insurance. ...
Same as term Binder: temporary insurance contract providing coverage until a permanent policy is issued. In property and casualty insurance, some agents have authority to bind the insurance ...
Have a question or comment?
We're here to help.