Required Minimum Distributions (RMD)
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Understanding the point at which you have to start taking money from your retirement account
When you reach age 721, the IRS requires that you withdraw a certain amount of money, called a required minimum distribution or RMD, from your retirement accounts each year. If you’re still working for an eligible Reform Movement employer at that time, you can choose to delay taking your RMDs until you retire.
Fidelity will calculate the annual required minimum distribution for your RPB 403(b) account—excluding any Rabbi Trust account balance—and RPB will notify you of your RMD amount and payment options at the beginning of the calendar year. You will pay ordinary income taxes on most RMDs unless it’s a qualified Roth distribution, which is tax free.
If you’re still working for an RPB-eligible employer, you can defer your RMD by completing the RMD Deferral Form each year.
- With the passage of the SECURE Act in December 2019, the RMD age requirement changed from 70½ to 72 for individuals who turn 70½ on or after January 1, 2020.
- Your RMD is based on your age and your 403(b) account balance as of December 31 of the prior year. Your spouse’s age is also a factor if you’re more than 10 years apart. Learn more about how the required distribution amount is calculated at the IRS website and estimate it using your prior year-end account balance as shown in the Fidelity NetBenefits system.
- You can request Fidelity to distribute your RMD from one or more funds that you’re invested in, otherwise the money is taken proportionally from ALL of your funds before year-end.
- You can always withdraw more than the RMD amount. However, RPB recommends you don’t take more than 15% of your account balance each year.
Penalties and tax considerations
- If you don’t withdraw the minimum amount, there is a 50% penalty (i.e., an excise tax) on the amount that isn’t withdrawn.
- Distributions are automatically taken proportionally from all of your investments.
- If you defer all or some of your first RMD to April 1, you will receive two RMD payments in that year: one for the year you turned 72 and one for the subsequent year. We recommend that you speak with your tax advisor to understand the impact on your taxes.
Need to access your retirement savings before retirement?
You may want to consider taking a loan from your 403(b) account.