Distributions Options for Starting RMDS

[Kathleen Reynolds]

#4442

You have several distribution options. First, select when to begin minimum distributions. You have four choices:

1. Have the distributions begin the year the owner reaches age where RMDs are required
2. Have the owner defer minimum distributions one year
3. Have the owner retire after age that RMDs are required; or
4. Have the owner make TEFRA 242 election. The TEFRA 242 designation allows a plan owner to delay commencement of benefits until actual retirement, even if it occurs after age that RMDs are required. It assumes a catch-up distribution for the years that were deferred after the age that RMDs are required year.

If you are illustrating a historical calculation (one starting in 2002), you can also select how those distributions should be calculated: using the 2002 Final Regs the 2001 Proposed Regulations; or the 1987 Proposed Regulations.

Likewise, in 2001 you can select either the 2001 Proposed Regulations or the 1987 Proposed Regulations.

If you are using the pre-2001 options, you can choose to recalculate the owner’s and/or the beneficiary’s life expectancy in each

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