Required Minimum Distributions (RMD) Common Questions
A required minimum distribution (RMD) is an annual, mandatory withdrawal from a tax-deferred retirement account, like a 403(b), 401(k), or traditional IRA, which you must start taking when you reach the IRS-defined age.
For your RPB 403(b) account, Fidelity will automatically process your annual RMD payment in early December—minus the amount of any withdrawals you've taken before their processing date. Withdrawals paid to you throughout the year count towards satisfying your RMD.
Read more about RMDs and your withdrawal options below.
The new SECURE 2.0 Act of 2022, raised the RMD age to 73 for plan participants turning 72 on or after January 1, 2023.
- Under the new law, if you turn 72 in 2023, you can hold off taking your first RMD until December 31, 2024―a full year later. You also have the one‐time IRS option to delay your first RMD to no later than April 1, 2025. If you decide to wait until April 1, 2025, you'll be required to take two distributions that year, satisfying both your first and second RMD.
Anyone who turned 72 on or before December 31, 2022, is not affected by the change in RMD age and must continue taking their RMD as scheduled each year.
- If you turn age 72 in 2023, you have until December 31, 2023, to take your first RMD. However, you have a one‐time IRS option to delay your first RMD until April 1, 2024.
If you continue to work for an eligible employer beyond age 73, you might not have to take an RMD until you retire. Contact RPB to learn when you'll need to start your required minimum withdrawals.
No. If you turned 72 on or before December 31, 2022, you must continue taking RMDs as scheduled each year.
There are three ways you can withdraw money from your 403(b) account:
- Systematic withdrawals. These are recurring monthly or quarterly withdrawals for an amount that you set. You can change the amount anytime by calling Fidelity. Withdrawals you take during the year count towards satisfying your RMD. Fidelity will send you an RMD payment in early December-minus any of the year's withdrawals.
- RMD systematic withdrawals. These are recurring monthly or quarterly withdrawals based on the amount of your annual RMD. Fidelity automatically adjusts the withdrawal amount each January to satisfy your RMD for that year.
Because you can't change the withdrawal amount, if you need extra cash during the year, you can make a one-time withdrawal.
- One-time withdrawals. You can make a single withdrawal to satisfy your RMD by logging in to NetBenefits or calling Fidelity.
The easiest way to satisfy your RMD is to use one of the automatic withdrawal options. This way, you avoid the potentially costly consequences of forgetting to take your RMD.
Call Fidelity at 800-343-0860 to discuss your options.
Only withdrawals you take before Fidelity’s RMD processing date in December will be counted towards satisfying your RMD. Withdrawals you’ve scheduled after that date will still be processed.
If you're on the RMD Systematic Withdrawal Plan, your recurring payments are automatically set up to satisfy your RMD.
If you don't take any withdrawals before Fidelity's processing date in December, you'll receive your full RMD payment for the year. If you want your RMD paid sooner, call Fidelity.
Fidelity calculates your RMD amount by dividing your retirement account balance as of December 31 of the prior year by your IRS life expectancy factor.
If your spouse is more than 10 years younger than you, Fidelity will use the IRS's Joint and Last Survivor Table to calculate your RMD as long as your spouse is your primary beneficiary for the entire calendar year.
Yes, you may take more than the RMD amount from your RPB plan in a given year.
If you continue to work for an eligible employer after your IRS-defined RMD age, you may be able to wait until April 1 after the year you retire, to take your RMDs from your workplace retirement plan. However, you must submit a deferral form to RPB for each year you continue to work.
Contact RPB if you have questions about delaying your RMD until after you retire.
Federal income tax will be withheld from the taxable portion of your RMD based on the IRS periodic wage withholding table and your withholding election form on file.
If you haven't made withholding elections, then the IRS default withholding option of married and three allowances will be used. State income tax will be withheld from the taxable portion of your RMD based on your state's withholding requirements and your election.
If you elect not to withhold taxes from your RMD, or if you do not have enough federal and/or state income tax withheld, you may be responsible for payment of estimated taxes. You may also incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient.
Refer to IRS Form W-4P (Withholding Certificate for Pension or Annuity Payments) for further information
You can have your RMD sent to your bank account electronically. Learn how to get started here. Or, you can have a check mailed to you.
If your RMD is not satisfied in a given year, you may be able to receive a waiver and avoid any penalties by filing IRS Form 5329. Make sure to include an explanation for why you missed the deadline and note that you've since taken your RMD.
The SECURE 2.0 Act of 2022 reduced the penalty for missed RMD amounts from 50% to 25%. You can request that the penalty be reduced to 10% by (a) taking your missed amount and (b) filing a corrected tax return within the applicable period.
Consult with your tax advisor if you missed the RMD deadline.
Your RMD for each employer-sponsored retirement plan must be distributed from that plan and does not have an impact on any RMD you may be required to take from your IRAs. You are not able to rollover your RMD to another retirement account.
If you have savings in more than one 403(b) plan, you can aggregate your RMDs and withdraw the entire amount from one of your 403(b) accounts to satisfy your annual RMD. Please contact your tax advisor to discuss your situation.
No, RMD requirements don't apply to Rabbi Trust balances.
This was adapted from two articles published by Fidelity Investments, which serves as our record keeper: SECURE Act 2.0 FAQ; RMD Common Questions