Asked 5/3/2010
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If I begin taking distributions from my 401k plan at age 65 (either in form of an annuity or installments; how does that affect the mrd requirements Do the distributions taken prior to age 70 1/2 have an effect on the MRD? If I purchase an annuity with a portion of my account balance at age 65, do i calculate MRD based on remaining balance? |
Answer 1/1 - Submitted 12/15/2010
You can start your RMD's at any time after 59 1/2. Your RMD's are based on the balance left at age 70 1/2. You are still paying your taxes if you withdraw money prior to 70 1/2. The 70 1/2 rule is only there so you have to take money out and start paying taxes on it. The IRS wants to make sure they get thier money. Thats why they have the 70 1/2 rule.
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