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All FAQs about Required Minimum Distributions (RMD)

Generally, federal tax rules require that you begin to withdraw money annually from your tax-deferred retirement accounts, such as employer-sponsored retirement plans or IRAs, when you turn 70 1/2. You should think about how a RMD fits into your overall retirement income plan. TIAA offers you a wide range of flexible income options for you to consider.
A required minimum distribution (RMD) is the minimum amount you must withdraw from your retirement account(s) to satisfy federal tax rules. Generally, you are required to start taking withdrawals from certain tax-deferred retirement accounts (including IRAs) when you reach age 70 1/2. 

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The amount is based on your account balance at the end of last year and the life expectancy factor provided by the IRS and found in the Uniform Life Table.  Your RMD will change every year based on those two numbers. Please note, if you're participating in a 403(b) retirement plan, any contributions and earnings credited before 1987 are not subject to the federal minimum distribution rules until the year you turn age 75. Keep in mind that any withdrawals you take before you are subject to the minimum distribution requirements, or withdrawals for more than the required amounts, will reduce your pre-1987 balance first.

You can call TIAA at 800-842-2252 for more information about the amount you need to take this year.

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You generally have to take a distribution each year from employer-sponsored plans, including 401(k), 403(b), 457(b) and other defined contribution plans, when you turn 70 ½ or retire, whichever is later (plan permitting). If you turn age 70½ or retire (and you’re already age 70½ or over) in the current year (e.g. 2018), you have two choices: You can take your first withdrawal (the amount required for the current year) this year (e.g. 2018); or, you can wait and take it next year (e.g. 2019), as long as it is paid by April 1. However, if you wait until the next year to take your first withdrawal, you’ll have to take two withdrawals in that year—one for the amount required in the current year (e.g. 2018) and one for next year (e.g. 2019)—which may increase your tax liability.

If you turned age 70½ or retired during a previous year, you need to take your minimum distribution by December 31st of the current year

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You’re required to start taking an annual distributions from Traditional IRAs no later than April 1 of the year following the year you turn 70 ½, regardless of employment status (e.g., if you turn age 70½ in 2018, you must begin taking distributions by April 1, 2019).  
Minimum distribution rules don’t apply to ROTH IRAs during the owner’s lifetime, though they may apply to the beneficiary that inherits the ROTH IRA.                                                                                                                    
 
Special rules may apply to SEP IRA please contact us for more information (800-842-2252)

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You can review your required minimum distributions by logging in to your account from the My Account tab. If your plan allows it, you can withdraw money online. If an online withdrawal is not an option, call us at 800-842-2252. Please be sure to contact us two to three months before you must receive your withdrawal to ensure you receive funds by the required deadline.

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If you don’t take the amount required, the IRS could assess a 50% excise tax on the amount not withdrawn.

If you are concerned with prior RMDs, please contact your tax advisor.

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 For your current employer’s plan: If the plan allows, you may be permitted to delay taking RMD from your current employer's plan until April 1 after the year you retire. 
 
For other tax-deferred retirement accounts: You’re required to withdraw a certain amount each year regardless of your employment status. It can get complicated, so we suggest discussing the specifics of your situation with your tax advisor. We can help answer any questions about TIAA retirement accounts from prior employers by calling 800-842-2252.

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Any withdrawal paid to you will count toward the RMD for the tax-deferred retirement account. In certain situations, you may elect to take your full RMD amount from one or more accounts instead of separately from each eligible plan or account. This is called aggregation, and the IRS permits it for 403(b) plans and IRAs. For a 403(b) retirement plan the RMD is calculated separately, but may be withdrawn from any of your 403(b) plan accounts. The same rule applies to your IRAs. Money withdrawn from an IRA will not count towards your 403(b) plan RMD and vice versa.  Money withdrawn from other types of retirement accounts will only count towards RMD for that tax-deferred retirement account and no amounts withdrawn from elsewhere will count towards that plan's RMD.  If you are not sure whether the withdrawal you received is enough to cover your RMD requirement, call us at 800-842-2252.

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A rollover or transfer increases the balance in the accumulation annuity to which it is applied and may result in a larger calculated RMD for that contract when you reach RMD age. However, a rollover or transfer from your TPA contract or fixed period annuity is not allowed once you reach age 70 1/2. After that age, TPA and fixed period annuity payments must be taken in cash. However, only in the calendar year in which payments begin, TPA or fixed period annuity apply toward your RMD for the accumulation contract (or any other RMD that may be satisfied using the aggregation rule). In years after the first, TPA payments, like other fixed annuity payments, satisfy the RMD for the amount settled into that contract. The RMD exactly equals the payment amounts. Nothing is left over that can be treated as RMD under another plan or contract under the aggregation rule.
 
If you have any questions or want to learn about other ways to satisfy the IRS Required Minimum Distribution rules from your TPA, please call us at 800-842-2252. We're here on weekdays from 8 a.m. to 10 p.m. (ET) and Saturday from 9 a.m. to 6 p.m. (ET).
 

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You generally have three options for your RMD withdrawal:
1) We can mail a check to your address.
2) You can receive the money in your bank account electronically.
3) You can withdraw the money and put it toward after-tax accounts. After-tax accounts include brokerage accounts, mutual fund accounts, after-tax annuities and college savings funds.

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When evaluating your required minimum distribution strategy, you may want to consider lifetime income options that provide you with guaranteed income that cannot be outlived. Keep in mind if you have been a long-term contributor to TIAA Traditional, you may receive additional amounts of income by creating a stream of guaranteed income.

In some cases, creating a guaranteed income stream may provide higher amounts of income in retirement while satisfying your required minimum distribution requirements. Our retirement specialists are available to discuss our range of flexible income options and choices. For additional information, please call us at 800-842-2252, weekdays 8 a.m. to 10 p.m. and Saturday 9 a.m. to 6 p.m. (ET). Any guarantees under annuities issued by TIAA are subject to TIAA's claims-paying ability.
 
Please note that full or partial annuitization will NOT reduce the calculated amount of your Required Minimum Distribution (which is determined as of the prior December 31 and cannot be changed) for the year of annuitization.  Annuity payments made in that first year will count towards satisfying the calculated RMD amount. Amounts applied to produce annuity income will no longer be part of the contract accumulation and will not factor into the RMD calculation for subsequent years. Instead, amounts applied to annuity income are "walled off" in their own RMD bucket. Annuity payments received in years after the year of annuitization will exactly satisfy the RMD with respect to the payout annuity. Such payments will not count towards satisfying the calculated RMD for any plan or contract. 

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This material is for informational or educational purposes only and does not constitute investment advice under ERISA. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made  based on the investor’s own objectives and circumstances.
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