Required minimum distributions, more commonly referred to as RMDs, are a congressionally-mandated distribution from traditional retirement accounts. The Internal Revenue Service recently established new RMD rules which dictate the minimum amount a retiree must withdraw from their account every year beginning by age 72 (70 ½ if you reach 70 ½ before January 1, 2020). The penalty for not taking your RMD is a tax of 50% on the amount that was not withdrawn in time.
For those fortunate retirees who have other sources of retirement income or who might otherwise not spend the assets in their qualified retirement accounts, the RMD requirement kicks in and creates taxable income.
As an alternative to higher taxable income as a result of a required RMD, Congress created Qualified Charitable Distribution rules, so donors may transfer their RMD to charity, such as the Cal-Nev-Ha Children’s Fund.
Learn how you can both lower your taxable income and support the Cal-Nev-Ha Children’s Fund by reading our Required Minimum Distribution FAQs.