What is a Required Minimum Distribution?
This is when a person's retirement plan distributions must begin. When RMD is applicable it must begin by April 1 of the calendar year following the year the participant attains the age of 70 ½ years. This is called the Required Beginning Date (RBD). The benefit amount must be based on life expectancy or joint-life expectancy. Any benefit withdrawal less than RMD is penalized by 50 percent of the difference between what was paid out and what should have been paid out.
