What is the Minimum Required Distribution (MRD)?
This is amount that is required to be distributed from your pension plan or IRA beginning in the year you turn age 70½. The first year’s MRD must be paid to you by April 1st of the following year (year 2). If you delay taking it until the following year, you will still be required to take out the second MRD for year 2 in year 2 which will result in two distributions in that year. If you are still employed, some plans defer this distribution until you actually retire as long as you are not a 5% owner. We calculate the MRD and send out a notice to the plan administrator for each applicable participant. Please note that the MRD must be calculated separately from any IRA’s that the participant might own. The MRD from a qualified plan must be taken from that qualified plan. Unlike IRA’s, these distributions may not be aggregated and taken from your IRA or another qualified plan.
