Make Sure I Comply with Distribution Rules
In general, you can continue to enjoy the benefits of tax deferral through your employer's plan as you enjoy retirement. In fact, depending on your age, you may be able to delay accessing your assets until you're ready to begin withdrawing them.
However, the IRS requires that you begin to take yearly required minimum distributions (RMD) from your account. Your required minimum distribution is the minimum amount you must withdraw from your account each year and will begin in the later of the calendar year in which you attain age 70½ or the calendar year in which you retire. RMDs from pre-tax accounts are subject to ordinary income taxes and cannot be rolled over to another eligible retirement plan or IRA.
Example: You turn 70 ½ on June 1, 2012. You can wait until April 1, 2013 to take your first RMD, but it will be based on your account value as of December 31, 2011.
However, for the first RMD you may elect to defer this payment until April 1 of the following calendar year. If you make this election, you will be required to receive two RMD payments for that calendar year. The IRS imposes an excise tax of 50% of the amount not distributed as required.
How much will my RMD be?
Nationwide will calculate your required RMD amount each year.
However, you may want to structure how your distributions are made in advance. To do so:
- Download and complete the Benefit Payment Booklet (PDF); or
- Contact us by phone to sign up
What if I'm still working?
If you are still employed, you are not required to take your RMD until April 1st of the calendar year following the year you retire. You should consult your own counsel or tax adviser before making decisions about distributions. Neither Nationwide nor its representatives may offer tax or legal advice.
Get the help you need
Contact us if you have questions about arranging your distribution.