Pub. 2 2012-2013 Issue 4

12 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S FEATURE ARTICLE “With a clear understanding of the RMD rules, you can competently assist your clients with their RMDs and take away some of the worry and confusion that they (and you) may have.” RMD Season Is Upon Us Y ear-end can mean dif ferent things to different people. For older retirees who have accumulated retirement savings, it means that it’s time to access more money before the IRS hits them with a hefty penalty tax for not getting their tax-deferred savings into the tax stream. For IRA and re- tirement plan administrators, it means that it’s time to gear up for required minimum distributions (RMDs). Abiding By the Rules Mandated by Congress to promote the use of retirement savings during retirement, Tra- ditional (and SIMPLE) IRA owners and retire- ment plan participants are required to even- tually withdraw at least a minimum amount from their accounts on an annual basis. These annual RMDs generally begin at age 70½ and must be taken no later than December 31 each year. The only exception to the December 31 deadline is a taxpayer’s first year RMD. In that case, a taxpayer must distribute the RMD no later than April 1 of the year following the year she turns age 70½. But a retirement plan may allow participants to delay their RMDs until April 1 of the year following their retire- ment from the employer, if after age 70½. The April 1 deadline is commonly known as the “required beginning date.” IRA and retirement plan administrators must do their part as well. Both are required to calculate RMDs for IRA owners and plan LISA WALKER Ascensus