Pioneer Investments: Taking Your Required Minimum Distributions

Variable Contracts Trusts
VCT Portfolio Listing
Home Funds & Products Variable Contracts Trusts Printable Version
Taking Your Required Minimum Distributions

The IRS requires most people to start withdrawing from IRAs and other tax deferred retirement accounts at age 70½. The withdrawal - called a required minimum distribution (RMD) - must meet or exceed a specific dollar amount each year, as determined by an IRS formula. (RMD requirements do not apply to Roth IRAs, unless you've inherited the account.)

Tax laws require that you take your RMD at least once per year. However, the IRS allows you until April 1 of the year following the year you turn 70½ to begin taking your RMD. This date is referred to as your Required Beginning Date. If you choose to delay receiving your first year's RMD, you must take two years' worth of RMDs in the same year - one by April 1 and the second by December 31. In the following years, you must take your required distribution by December 31 of each year.

RMD tip:
You may be eligible to defer your RMD if you are a participant under a 403(b) arrangement or an employer sponsored plan and are still employed by the employer through which your contributions were made.

If eligible, you can delay your distribution until the later of:

  • April 1 following the year you reach age 70½, or
  • April 1 following the year you retire (This second option is not available to IRA holders or to business owners who own 5% or more of the business sponsoring the plan.)

It can be costly if you don't meet IRS requirements for taking RMDs. You could be subject to a 50% federal tax penalty - on top of any income tax you might owe - on amounts that you should have, but did not, receive.

How Your Required Minimum Distribution Is Calculated

Simply stated, your RMD amount is calculated by dividing your December 31 account value by your life expectancy factor. The factor is taken from the IRS Uniform Table (IRS Table III), which automatically assumes that you have a beneficiary who is 10 years younger. This table is used regardless of whom you have actually named as beneficiary. (See the Uniform Lifetime Table below.)

For example: Your retirement account was valued at $100,000 as of December 31, 2010. You attained age 70½ in 2011 and your life expectancy factor according to the Uniform Table is 27.4 years. The minimum amount you must withdraw for 2011 is $3,649.64 ($100,000 27.4 = $3,649.64).

The Calculation Formula to Determine Your RMD:

December 31 balance1  = Your RMD
Your factor from the Uniform Lifetime Table

Uniform Lifetime Table (IRS Table III)

Age Factor Age Factor
70 27.4 93 9.6
71 26.5 94 9.1
72 25.6 95 8.6
73 24.7 96 8.1
74 23.8 97 7.6
75 22.9 98 7.1
76 22.0 99 6.7
77 21.2 100 6.3
78 20.3 101 5.9
79 19.5 102 5.5
80 18.7 103 5.2
81 17.9 104 4.9
82 17.1 105 4.5
83 16.3 106 4.2
84 15.5 107 3.9
85 14.8 108 3.7
86 14.1 109 3.4
87 13.4 110 3.1
88 12.7 111 2.9
89 12.0 112 2.6
90 11.4 113 2.4
91 10.8 114 2.1
92 10.2 115+ 1.9

1 Check your year-end retirement statement for your December 31 balance. If you hold multiple retirement accounts with multiple retirement accounts with multiple custodians, see Questions and Answers.

RMD tip:
If your spouse is more than 10 years younger than you and you name him or her as your sole beneficiary, you can reduce the amount of your RMD. Use the Joint Life and Last Survivor Expectancy Table (Table II) that can be found in IRS Publication 590, or call Pioneer for further assistance.

Page 1 of 3 | Next Page

Related Resources

Check the background of this firm on FINRA's BrokerCheck.

Before investing, consider the product's investment objectives, risks, charges and expenses. Contact your advisor or Pioneer Investments for a prospectus or summary prospectus containing this information. Read it carefully. To obtain a free prospectus or summary prospectus and for information on any Pioneer fund, please download it here.

U.S. Home | Global Home | Site Map | Careers | Privacy and Security | Legal | Business Continuity
Securities offered through Pioneer Funds Distributor, Inc., 60 State Street, Boston, MA. 02109. Underwriter of Pioneer mutual funds, Member SIPC © 2016 Pioneer Investments.