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Required Minimum Distributions (RMD)

Understanding the point at which you have to start taking money from your retirement account

When you save money in a retirement plan, eventually the IRS requires that you start taking annual withdrawals called required minimum distributions (RMD). With the passage of the SECURE Act in December 2019, as of 2020 you’re required to start taking these distributions by April 1 of the year after you turn 72. If you’re still working for an eligible Reform Movement employer at that point, you can choose to defer the start of taking your RMD until you retire.

RPB automatically calculates the required minimum distribution amount for your RPB 403(b) account—excluding any Rabbi Trust account balance—and will notify you of your RMD amount and payment options at the beginning of the calendar year. If you have more than one 403(b) account, you can choose to take the total, combined RMD amount from any one or more of your 403(b) accounts. You will pay ordinary income taxes on most RMDs unless it’s a qualified Roth distribution, which is tax free.

If you’re still working for an RPB-eligible employer, you can choose to defer your RMD by completing the RMD Deferral Form.

RMD amounts

  • Your RMD is based on your age and your 403(b) account balance as of December 31 of the prior year. Your spouse’s age is also a factor if you’re more than 10 years apart. Learn more about how the required distribution amount is calculated at the IRS website and estimate it using your prior year-end account balance as shown in your InfoExpress portal.
  • If you have more than one 403(b) account, you can choose to take the total, combined RMD from any one or more of your 403(b) accounts.
  • You can request RPB to distribute your RMD from one or more specific investment fund allocations, otherwise the money is taken proportionally from ALL your funds before year-end.
  • You can always withdraw more than the RMD. However, RPB recommends you don’t take more than 15% of your account balance each year.
Important deadlines
  • Once you turn 72, you’re required to withdraw your RMD by December 31 each year.
  • You can postpone taking your first RMD, but it must be taken by April 1 in the year after you’ve turned 72. You'll also be required to take your second RMD by the end of that same year.
  • If you’re 72 and still working, you can defer all or a portion of your RMD until you’re no longer employed by an eligible Reform Movement Organization by completing the RPB Deferral Form.

Penalties and tax considerations

  • If you don’t withdraw the minimum amount, there is a 50% penalty (i.e., an excise tax) on the amount that isn’t withdrawn.
  • Distributions are automatically taken proportionally, which may impact the growth of your account. Call us if you’d like to change these instructions.
  • If you defer all or a portion of your first RMD to April 1, you will receive two RMD payments in that year: one for the year you turned 72 and one for the subsequent year. We recommend that you speak with your tax advisor to understand the impact on your taxes.

Need to access your retirement savings before retirement?

You may want to consider taking a loan from your 403(b) account.

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