What are Minimum Required Distributions (MRDs)?
Retirement plans cannot be used to house money on a tax favored basis forever. A terminated participant, and any owner whether terminated or not, must begin paying out the account by receiving required minimum distributions for the year that he reaches 701/2. A table of factors is used to determine what percentage of the account must be paid out each year. Failure to make the payment results in a 50% excise tax!
