Small Business Dictionary

Required Minimum Distribution (RMD)

The Required Minimum Distribution (RMD) is the lowest amount that SEP Individual Retirement Account (IRA), SIMPLE IRA, and Traditional IRA owners, as well as certain qualified plan participants, can distribute from their accounts by April 1 following the year they become age 70.5 and each year after that. To determine your Required Minimum Distribution (RMD), divide the prior year-end fair market value of your retirement account by the applicable distribution period or your life expectancy.