Congress suspended the required minimum distributions for IRA, 401(k) and other retirement plan investors age 70-1/2 last year, since people’s balances took such a hit the year before and many wanted to remain invested in hopes of a rebound. As the market has, indeed, rebounded nicely, Congress is likely to reinstate the RMDs this year, experts say.

The IRS calculates a person’s expected lifespan beginning at age 70 and asks investors to divide their remaining IRA balance by that figure to determine a minimum amount they must withdraw from their account each year. If not, investors are subject to a 50% penalty. Currently, a person age 70-1/2 must divide their balance by 24.7.

Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access