Guide to Required Minimum Distributions

Aging Canadian population will have a major financial impact on the bottom line of the country’s provinces Shutterstock

Required minimum distributions (RMD) are mandatory once you retire and reach 73. The RMD is the smallest amount that can be withdrawn from a tax-deferred retirement account yearly. You’re required to take distributions from various retirement accounts. 

But it can be confusing as to what and when you should take the distributions. Who decides how much you take, and does it affect Social Security payments? 

What Retirement Plans Are Affected by RMDs?

In general, you must take withdrawals from your pretax accounts. These include:

• traditional individual retirement account (IRA)
• simplified employee pension (SEP) IRA
• SIMPLE IRA (savings incentive match plan for employees IRA) 
• various retirement plan accounts

As of 2024 or later, Roth IRAs don’t come under the RMD rules. But you should have taken RMDs in 2023. They do need to be withdrawn after the plan holder has passed.