Required Minimum Distributions

Depending on your account type, you can log in to take your RMD or use one of the forms below. Need to know how much? Calculate your RMD using our calculator.

Generally, RMDs are taken proportionately from all IRAs on file. However, if you prefer, you may request that we take your distribution from a specific account.

Note: Consolidating your IRAs can make tracking your RMDs easier. Learn more .

You must begin taking annual RMDs when you reach age 70½. You must take your first annual minimum distribution no later than April 1 of the year after you reach age 70½.² If you take your first distribution between January 1 and April 1 of that year, you must take your next distribution on or before December 31 of the same year. For each year that follows, you must take your minimum distribution on or before December 31.

Generally, you will owe ordinary income taxes on your distribution in the year you receive it. If you made non-deductible contributions to your IRA, a portion of your distribution will be tax free.

Your required minimum distribution generally is based on your life expectancy, beginning in the year you attain age 70. Find your age on the "Distribution Periods" table from the IRS below to determine the number of years to use in your calculation.

However, if your spouse is the sole beneficiary of your IRA and is more than 10 years younger than you, the IRS allows you to use the joint life expectancy of you and your spouse. This calculation, which uses a different IRS table, will result in lower required minimum distributions. Call an American Century Investment Consultant or your tax advisor for help with this calculation.

Required Distribution Periods: Uniform Life Expectancy

Follow the steps below to estimate your RMD. Consult your tax advisor regarding your specific circumstances:

Required Distribution Example

1. Determine your age as of December 31 of the current year:  Age 71
2. Determine your required distribution period from the table above:  26.5
3. Determine the total balance of your IRAs (excluding Roth IRAs) as of December 31 of last year:  $300,000
4. Calculate your required minimum distribution for the current year (divide Line 3 by Line 2):  $11,321

This hypothetical information is for illustrative purposes only and not intended to represent any particular investment product.

• As the name indicates, your required minimum distribution must reach a minimum amount. The IRS rules are specific and strict. If you do not take (at least) your required minimum distribution, you will be subject to a 50% penalty tax on the amount you did not take.
• For example, if you are required to withdraw $10,000 this year but take only $9,000, you may be subject to regular income taxes on the $9,000 and a 50% penalty tax on the $1,000 you left in the account (the excess accumulation). You also must withdraw the remaining $1,000 next year along with your required minimum distribution for that year.
• Although IRS rules require a minimum distribution amount, you can take more than the minimum if you need the extra income. Talk to your tax advisor about your needs as you plan your RMD.
  

Just because you've reached 70½ doesn't mean you can't keep your money working for you. If you'd like to keep your RMD money invested, you can exchange it into a taxable account. We offer more than 80 no-load funds, including asset allocation portfolios. Review our funds or call us to discuss your goals and we can help you determine the right funds for your situation.

Required minimum distributions from your IRA after your death are based on who you name as beneficiary, your date of death and your age on that date:

• If you die before April 1 of the year after you reach age 70½, or your IRA is a Roth IRA, the beneficiary's required minimum distributions would be calculated using his or her life expectancy.
• If you die on or after April 1 of the year after you reach age 70½, the beneficiary's required minimum distributions would be calculated using the longer of his or her life expectancy or your life expectancy based on your age at death. This allows a beneficiary who is older than you to use your life expectancy, which would result in smaller minimum distributions.
• If you die after reaching 70½ and have not taken your RMD for the year, your beneficiary must take the remaining amount of your RMD for the year in which you die.
• If you name your spouse as the beneficiary, he or she can inherit the IRA as his or her own. RMDs for the inherited assets would be based on the spouse's age.

Beneficiaries must be on file before or as of the date of death. For purposes of calculating the required minimum distributions, the designated beneficiary is determined on September 30 of the year following your death.

Visit the IRS website  for more information about required minimum distributions.

¹ If you have recently reached age 70½, be sure to read the section When to Take Distributions.

² If you are a 403(b), governmental 457(b) or a qualified plan participant who is not a 5% owner, your required beginning date is generally April 1 of the year you reach 70½ or after you retire, whichever is later. Check with your employer to determine when you are required to take a distribution from your plan.