Required minimum distribution (RMD) FAQ
General required minimum distribution (RMD) questions
The Internal Revenue Service (IRS) requires clients to take minimum distributions out of certain IRAs and retirement plans once they reach age 72. Some clients who own an inherited IRA may also have to take an RMD.
The SECURE Act signed into law on Dec. 20, 2019 raises the RMD age to 72 from 70½. For those who turned 70½ on or before June 30, 2019, the first RMD will still have to be taken by April 1, 2020, and subsequent RMDs will still apply.
The RMD rules apply to the following:
- Traditional IRAs and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs
- Inherited IRAs and Inherited Roth IRAs
Note: RMD rules do not apply to Roth IRAs while the original owner is alive
- All employer sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans, 457(b) plans, and Roth 401(k) accounts
- If you qualified to take your RMD by turning 70½ on or before June 30 in 2019 or prior years, the SECURE Act does not change your timing.
- You have until April 1, 2020 to take your first RMD.
- If you already took your initial RMD when you turned 70 1/2, you have until December 31 to take your subsequent RMD each year.
- When you turn age 72, your initial RMD may be postponed until April 1 of the following year.
- If you wait until April 1 to take your initial RMD distribution, you will have to also take your subsequent distribution by Dec. 31 of the same year
- Your RMD distribution deadline is provided to you each year on Form 5498, IRA Contribution Information, and on your financial statement.
Note: If you are still employed by your 403(b) employer at age 72, you can postpone taking your initial RMD from your Tax-Sheltered Annuity (TSA) or Tax-Sheltered Custodial Account (TSCA) until retirement. However, we will report the RMD information to you on your financial statement.
- Qualifying distributions that you take during the year from your IRAs or other retirement plans (excluding Roth IRAs) count towards fulfilling your RMD requirement for the year, for the plan that the distribution is taken from.
- Your Ameriprise financial advisor can help you determine if the withdrawals you have taken during the year have met your RMD requirements for Ameriprise Financial investments.
- If you need additional assistance, contact the Ameriprise Service Center at 800.862.7919.
- If you own IRAs or other retirement plans at other financial institutions you will need to contact those institutions directly to verify your RMD information.
Yes, you can take more than the required minimum amount out of your IRA or retirement plan. Your total distribution amount for the year will be reported on Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., and appropriate tax consequences will apply.
Note: For 403(b) plans, any amount in excess of the RMD would be considered a distribution eligible to be rolled over. These distributions are subject to plan sponsor approval and a 20% minimum federal tax withholding.
If, in any year, you take more than the required minimum distribution for that year, you will not receive credit for the additional amount when determining the minimum required distributions for future years. You cannot treat the amount that is more than the required minimum distribution as part of your required minimum distribution for any later years.
There is no IRS requirement to take an RMD distribution from a Roth IRA while the original owner is living. There are RMD requirements for beneficiaries who own Inherited Roth IRA accounts. Distributions taken from your Roth IRAs do not count towards meeting RMD requirements from other IRA plans.
If you failed to withdraw your RMD, failed to withdraw the full amount of the RMD, or failed to withdraw the RMD by the applicable deadline, contact your financial advisor to ensure that you take the correct amount as soon as possible.
Consult with a qualified tax professional to take any appropriate actions when filing your tax returns.
If you do not withdraw the required amount by the deadline, an IRS penalty (excise tax) of 50% may apply to the required amount that was not withdrawn.
RMD calculations and notifications
Your RMD amount, if you are under the rules in effect prior to the SECURE Act, is calculated every year based on your age, the fair market value (FMV) or entire interest value (EIV) of your plan on Dec. 31 of the prior year, and other factors.
If you have RMD requirements for plans held at Ameriprise Financial, the amount will be available in the following locations for most plan types:
- Your RMD amount for the current year is displayed on the Form 5498 for the prior tax year.
- For example, your 2019 Form 5498 contains your RMD amount for 2020.
- Your RMD information will appear on monthly and quarterly financial statements.
- The financial statement includes information for RiverSource® annuities held inside a brokerage account
- The information on the financial statement doesn’t take into consideration any IRA or retirement plan assets held outside of Ameriprise, including third party annuities
- For Inherited IRA's or Inherited Roth IRAs, the RMD amount will not be displayed on Form 5498, on the notification letter or on the financial statement.
- Your financial advisor or a qualified tax professional can help you calculate your RMD amount(s) for these plan types
- For more information see Why isn’t my RMD amount displayed on the financial statement for my Inherited IRA? below
Note: Although separate client RMD notification letters will not be sent for most plans because the information is now available on financial statements, notification letters to the plan sponsor will continue to be sent for 401(a) plans.
The amount that appears on the financial statement in the “2020 distribution taken” column is the total of the following distribution types which occurred in your account during the year:
- Retirement distribution (distribution code 7)
- Death distribution (distribution code 4)
- Roth distribution in the 1st five years other than 1998 Roth conversion (distribution code T)
- Roth distribution over 5 years and death distribution (distribution code Q)
Distributions such as disability, excess contribution removals, recharacterizations, or conversions aren’t included in this amount.
In the RMD section of the financial statement, each IRA plan you own is listed on a separate line. The calculations are done on each plan separately and are not combined with other plans on the statement. The total amount for each plan type reflects the fair market value (FMV) or entire interest value (EIV), the RMD amount, any distributions taken during the year and the remaining RMD amount less distributions.
There is no calculation that looks at your IRA distributions holistically across all of your plans. Therefore, if you’ve taken your entire RMD distribution from a single plan, the financial statement will still show a remaining amount for 2019 for other plans that you own at Ameriprise.
If you close certain RiverSource® annuity IRA accounts during the year, the closed account and its distribution information will no longer appear on the financial statement or in the RMD window. However, distributions you took from that plan during the year may be counted towards fulfilling your RMD for that IRA plan for the year.
To make sure you take the full required amount you must consider and review the distributions taken from all of your plans, at Ameriprise and elsewhere.
- Each RiverSource annuity IRA (including RAVA 5) is considered a separate plan. Each annuity has a unique account number so it does not get assigned a Plan ID on our system.
- Investments like Managed Accounts, Ameriprise certificates, and brokerage accounts are combined together in one Custodial plan. A Plan ID is assigned to the entire Custodial plan and will be displayed in the “Plan ID” column.
- SIMPLE IRA plans will display the SRA group number next to the plan name.
The account or plan you inherited from your spouse, who had an RMD requirement for 2020, will appear in the RMD window on your financial statement.
In subsequent years the inherited account or plan will appear in the RMD section, without an RMD amount. See the following question for more information.
We do not calculate or provide RMD amounts for Inherited IRAs because we do not always know what elections you made as beneficiary of the account(s), your relationship to the deceased, the age of the original account holder when he or she died, or when the estate was settled.
If you own an Inherited IRA, please work with your financial advisor or a qualified tax professional to calculate your RMD amount(s).
Prior to the Secure Act, beneficiaries who inherited retirement accounts (such as a traditional or Roth IRA) could take the RMDs over their lifetime. The SECURE Act changes that financial strategy for most non-spouse beneficiaries who inherit their retirement account on or after Jan. 1, 2020. As a result:
- Most non-spouse beneficiaries must take the account proceeds (and pay the corresponding taxes) within 10 years of inheriting the account. This can be done with any number of distributions.
- Spouse beneficiaries, non-spouse beneficiaries who are no more than 10 years younger than the IRA owner and non-spouse beneficiaries who are disabled or chronically ill will continue to be able to stretch their IRAs over their lifetime.
- If a minor child inherits the IRA, the 10-year period begins when the beneficiary reaches the age of majority (the age at which a minor child legally becomes an adult, generally between 18 – 21 years old).
- A beneficiary who inherits an individual retirement account before the end of 2019 can still draw down the account over their lifetime. However, if a beneficiary inherits an IRA before the end of 2019 and dies Jan. 1, 2020, or later, that beneficiary’s beneficiary will be subject to the 10-year rule. For example:
- Allen’s son, Joe, inherits Allen’s IRA on Nov. 12, 2015. Joe takes RMDs over Joe’s life expectancy.
- On Feb. 12, 2020, Joe dies. Joe’s spouse, Fran, inherits the remainder of the IRA Joe inherited from Allen. Fran must take out the remainder of the IRA within 10 years.
Taking my RMD
Some requests may be made over the phone, while others must be made in writing. Your financial advisor or our customer service center can provide you with the forms needed to request your distribution.
To request your RMD, contact your financial advisor or customer service at 800.862.7919.
To ensure your 2020 RMD is processed by the IRS deadline of Dec. 31, 2020, your request must be received in our customer service center by Dec. 15, 2020.
We will process all requests as quickly as possible. However, we cannot guarantee any requests made after Dec. 15 will be completed by Dec. 31.
To request your RMD, contact your financial advisor or customer service at 800.862.7919.
No, we do not automatically distribute your RMD amount. There are factors that you should consider when taking your RMD like tax withholding or which investments or tax lots you want to distribute from. To ensure that your RMD distribution meets your specific situation, we require you to contact us each year to request your distribution.
If you have a systematic distribution arrangement on your account(s) you may be satisfying your RMD requirements with the distributions. However, we do not guarantee that the amount withdrawn through a systematic arrangement is sufficient to meet your RMD requirements.
Ultimately, you are responsible for satisfying your RMD requirements each year. Consult with a qualified tax professional to ensure that you are meeting IRS requirements.
Yes, you can withdraw your entire IRA required distribution amount out of any account within any of your IRA plans (excluding Roth IRA, Inherited IRA and Inherited Roth IRA plans) at any financial institution. You can also withdraw a portion from each IRA account.
For more information see the next question.
- Although the RMD amounts are calculated separately for each IRA plan, once calculated, you can distribute the entire required amount from any account in any of your IRA plans (excluding Roth IRA, Inherited IRA, and Inherited Roth IRA plans) at any financial institution.
- You can also withdraw a portion from each IRA plan
- Withdrawals from a non-IRA plan, such as 401(a) or 403(b), cannot be used to meet the RMD requirements for your IRA and vice versa.
- RMDs have to be calculated and distributed separately from each plan for the following plan types:
- Inherited IRA
- Roth Inherited IRA
- 401(a) plans such as profit sharing or money purchase
- 403(b) plans such as Tax-Sheltered Annuity or Tax-Sheltered Custodial Account
Yes, you can take your RMD from any financial institution as long as you follow the rules for distributing from various plan types.
For more information see the question above Can I combine my RMD amounts from different plans and take the distribution from one of the plans?
If you are still employed by your 403(b) employer at age 72, you can postpone taking your initial RMD from your Tax-Sheltered Annuity (TSA) or Tax-Sheltered Custodial Account (TSCA) until retirement. However, we will continue to report the RMD information to you on your financial statements.
If you are the surviving spouse who is the sole beneficiary of your deceased spouse's IRA, you may elect to be treated as the owner and not as the beneficiary. If you elect to treat your deceased spouse’s IRA as your own, the required minimum distribution (if any) will be determined as follows:
- If you become the owner in the year your spouse was deceased and they have already taken their RMD, you do not have to recalculate the RMD or take an additional distribution.
- If you become the owner in the year your spouse was deceased and they have not taken their RMD, you must take the deceased’s RMD amount for that year.
- In the year following the year your spouse was deceased, the RMD amount (if any) will be based on your information as the new owner.
Consult with a qualified tax professional to ensure that you are meeting IRS requirements.
Tax withholding and tax reporting
In general, distributions from a traditional IRA are taxable in the year you receive them. You will receive Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., which reports your total distribution amount, taxable amount, and any tax withholding taken. However, the IRS Form 1099-R you receive will not specify that this was an RMD distribution.
Consult a qualified tax professional to understand your individual tax liability.
Your tax advisor can help you determine the amount of withholding applicable for your specific situation. Ameriprise customer service representatives do not offer tax advice, such as your appropriate withholding amount.
Qualified Charitable Distributions
A qualified charitable distribution (QCD) is a distribution from an IRA directly to an eligible charity, bypassing the owner of the account. A QCD is generally a nontaxable distribution when made directly by the trustee of your IRA (other than an active SEP or SIMPLE IRA) to an organization eligible to receive tax-deductible contributions. You must have reached at least your initial RMD age when the distribution was made.
Yes. QCDs count towards your IRA required minimum distribution.
Yes, we can send your RMD directly to a charitable organization if we receive your request in writing.
To get the necessary paperwork, contact your financial advisor or customer service at 800.862.7919.
A QCD is generally nontaxable, up to a maximum annual exclusion limit.
To determine exclusion limits and tax liability consult with a qualified tax professional or review IRS Publication 590-B, Individual Retirement Arrangements (IRAs)
The Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., you receive from Ameriprise Financial reporting your distribution will not provide the charitable contribution information you need to file your tax return.
You must have acknowledgment of your contribution from the recipient of the charitable contribution. See Records To Keep in IRS Publication 526, Charitable Contributions.
For more information about required minimum distributions:
- Contact your financial advisor or qualified tax professional
- If you don’t currently work with a financial advisor or tax professional, contact the Ameriprise Advisor Center at 800.297.2012 for assistance.
- Call customer service at 800.862.7919
- Visit the IRS website and review IRS Publications: