- Self-Directed Accounts
- Investment Types
- Why Equity Trust
- Institutional Solutions
Managing Your Account
Did you know that certain types of retirement accounts require that you withdraw money from them each year after you reach a certain age? These withdrawals are known as required minimum distributions or RMDs. If you have a retirement account, it’s important to learn whether you need to make these distributions, as well as when and how to do it.
Retirement account owners with Traditional IRA, SEP IRA, SIMPLE IRA, 401(k), and 457(b) plans are required to begin taking minimum distributions from the account when they reach age 72 and continue taking these annual minimum distributions for as long as they hold the account.
You must begin taking required minimum distributions after you reach age 72. The IRS gives you until April 1 of the year following the calendar year in which you reach age 72 to make the first withdrawal.
(Note: The minimum age is 70½ for those who turned 70½ before January 1, 2020.)
Your RMD must be withdrawn by December 31 of each calendar year for as long as you hold the account.
While you must calculate the RMD for each IRA you own, you may choose to withdraw the total amount from just one account (or from a combination of accounts of your choosing). It does not matter whether these accounts are held with the same custodian or with multiple custodians.
However, if you own a 401(k) or 457(b) plan, you must take RMDs separately from those accounts.
From the IRS: “The required minimum distribution for any year is the account balance as of the end of the immediately preceding calendar year divided by a distribution period from the IRS’s ‘Uniform Lifetime Table.’”
The IRS provides worksheets to help you calculate your distribution amount.
Yes, once you’ve reached age 59½ you’re able to withdraw any amount you wish from your account penalty-free.
As noted above, if you have multiple IRAs you may choose to take your total required distribution from just one account. If one account holds illiquid assets and the other holds liquid assets, it may be easier to take a withdrawal from the account with liquid assets.
If your IRA’s value is primarily in alternative (and illiquid) assets, such as real estate, promissory notes, or gold, you may be faced with a challenge. Consulting with a qualified tax professional or financial advisor can assist you in evaluating your options to determine the best approach. When your account holds an asset such as real estate, potential options might include:
If you choose to distribute a portion of the asset personally, there are processes to make sure the asset’s value is up to date and you have the asset re-titled to reflect the change of ownership. Contact Equity Trust to determine the process and documentation needed to facilitate the distribution, revaluation, or sale of the asset.
Again, a financial professional can review the aspects of each option with you.
Provided you have the funds available, you can take a distribution from your Equity Trust Traditional IRA, SEP IRA, or SIMPLE IRA through our online account management system myEQUITY: simply navigate to Money Movement > Distribution to get started.
Visit the IRS website for the details and rules regarding required minimum distributions.
You are leaving trustetc.com to enter the ETC Brokerage Services (Member FINRA/SIPC) website (etcbrokerage.com), the registered broker-dealer affiliate of Equity Trust Company. ETC Brokerage Services provides access to brokerage and investment products which ARE NOT FDIC insured. ETC Brokerage does not provide investment advice or recommendations as to any investment. All investments are selected and made solely by self-directed account owners.Continue