via Wall Street Journal
If you are one of the millions of Americans with a retirement-savings account, three of the most important letters in your financial life might be these: RMD.
They stand for required minimum distribution, which is something that the nation’s baby boomers now need to grapple with for the first time. It refers to an annual payout that savers must take from their retirement kitty at a certain point, as required by law.
The first of the boomers (people born mid-1946 through 1964) are just now hitting the age of 70½, when most will be required to pull money out of their 401(k)s and IRAs, but there are a dizzying array of exceptions and deadlines regarding these payouts. For example, some people who are still working at age 70½ don’t have to start taking RMDs from a 401(k).
“I was surprised at how complicated the process was for me—and I’m an expert,” says Natalie Choate, a lawyer with Nutter, McClennen & Fish in Boston who turned 70½ last year.