Required Minimum Distribution (RMD)
When you turn age 70½ and are retired, the law says you must begin to take a required minimum distribution (RMD) from your Texa$aver 401(k) and/or 457 Plan(s). If you have an account balance in both Plans, you will need to complete a separate RMD form for each. The RMD is calculated separately for each Plan using your account balance as of the last day of the previous year.
- If you have turned 70½ in the calendar year, you will have until April 1 in the following calendar year to take your RMD for the current tax year. If you wait until January 1, you will need to take another RMD by December 31 of that year and will be taxed on both in that year.
- If you are still employed, and you have already begun taking your RMD, you may choose to stop receiving distributions until you retire. If you are receiving installment payments, Great-West Retirement Services® will continue these payments unless you notify Great-West in writing to discontinue.
- If you have retired and do not take the RMD in a given year, you will have a penalty of 50% of the amount that should have been distributed.
Due to the RMD law complexity, the Texa$aver Program encourages you to consult with your own tax advisor or the IRS to discuss the best way to comply with the rules based on your individual financial needs.
You must begin taking distributions from your account at age 70½ (if you are retired). When you are ready to set up or receive your annual RMD, contact Texa$aver.
