Required Minimum Distributions (RMD)
What is an RMD?
As a Beneficiary, your RMD calculation is impacted by a number of factors. The amount is calculated using your total account value, including Roth assets, as of the end of the preceding calendar year divided by the life expectancy factor for your beneficiary category.
Note: If the Participant’s death occurs after meeting RMD age, any unsatisfied RMD value in the year of death will be paid out to any Beneficiaries at the time a claim is made.
The RMD rules which apply to untimely claims are very complex. If this applies to you, you should discuss with your legal counsel or tax advisor.
Eligible Designated Beneficiaries (EDBs) are defined as a Beneficiary(ies) who, at the time of the Participant’s death, is one of the following:
- surviving spouse
- child of the Participant who has not reached the age of majority (age 21)
- individual not more than 10 years younger than the Participant,
- individual with a disability
- individual with chronic illness
- a see-through trust Beneficiary(ies) who would otherwise qualify as an EDB.
Spousal EDBs who claim the account timely are not required to begin taking RMDs until either the calendar year in which the Participant would have attained RMD age or the calendar year immediately following the year of the Participant’s death, whichever is later.
Note: Spousal beneficiaries can elect to be treated at the employee for RMD purposes. Call a Retirement Specialist for more information about this election.
In general, Non-Spousal EDBs are required to begin taking RMDs in the calendar year immediately following the year of the Participant’s death.
Minor children are required to begin payments the year following the Participant’s death and must fully liquidate the account no later than the end of the year in which they attain age 31.
Designated Beneficiaries (DBs) who claim the account timely prior to the Participant reaching RMD age, are not required to take annual RMDs. DBs are required to fully liquidate the account no later than the end of the year containing the 10th anniversary of the Participant’s death.
However, if the Participant passed away after reaching RMD age, then DBs are required to take annual RMDs the year following the Participant’s death and also fully liquidate the account no later than the end of the year containing the 10th anniversary of the Participant’s death.
Non-Designated Beneficiaries (NDBs) are defined as non-individual entities such as charities, organizations, estates, or non-see-through trusts. NDBs must begin RMDs in the calendar year immediately following the year of Participant’s death.
Nationwide, your employer’s plan administrative service provider, will calculate your RMD amount each year and work with you to receive it in time to comply with the RMD rules.
For participants and alternate payees, the amount of your RMD is calculated using your pre-tax account value as of the end of the preceding calendar year divided by your life expectancy factor. If you are a Beneficiary, your RMD amount is calculated using your total account value and depends on your beneficiary categorization (see "What if I am a Beneficiary" section above for more information).
Once you retire and have met your RMD age, you must begin withdrawals. Your first RMD can be deferred until April 1 of the following calendar year. All subsequent RMDs cannot be deferred and must be completed by the end of the calendar year.
Example: You are retired, and you reach your RMD age on June 1, 2024. You can wait until April 1, 2025 to take your first RMD, but it will be based on your account value as of December 31, 2023.
Note: If you are a rehired annuitant, you are required to take an RMD.
To receive your RMD, you can do any of the following:
- Log in to your online account to complete an Online Distribution Request, or to download the form; or
- Contact Us using the link at the top of the page.
If you have a SDO, your core account balance must have sufficient funds to cover the unsatisfied RMD plus the core minimum requirement. It is your responsibility to maintain your core account balance.
If you fail to withdraw your RMD amount in a year in which you are required to do so, you may be subject to an excise tax of 25% of any unsatisfied RMD amount. Under certain circumstances, the excise tax can be reduced to 10%.
Spousal Alternate Payees, in general, are not required to begin taking RMDs until the year in which original Participant attains RMD age.
Non-Spousal Alternate Payees, in general, are also not required to begin taking RMDs until the original Participant reaches RMD age, unless the Participant passes away prior to reaching RMD age, in which case RMDs must instead begin in the calendar year immediately following the year of death of the Participant.