RMD

[Bettywebster]

Why are they asking me if some are all of my Supplemental pension is rmd I never had to do this before they said because I turned 70 1/2 yrs old this is a supplement to my regular pension I get on e a year forever do I have to list it as a rmd????

[VolvoGirl]

Just say Yes it's the RMD.  Anything the pension pays you is considered to be the RMD.

[GNoell3347]

How is the RMD determined?

[VolvoGirl]

For IRA and 401k the RMD is based on the prior year balance

Each plan might automatically send you the amount at the beginning of the year. Mine did. If they are the same kind of accounts like IRA you can take the total RMD for all of them from one account or split it up. You have to take the RMD separately from IRA and 401k accounts.

See this IRS FAQ on RMDs….
http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Required-Minimum-Distributions

Here is a worksheet to calculate the IRA RMD
https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf

[Elandale]

I'm no tax expert but the advice to just say yes to the RMD question for a pension is probably bad advice. There is a legal requirement for withdrawal from a tax deferred account (401K like). If you claim your pension as the RMD you have not met the legal requirement. IMHO TurboTax is in error here. It needs to first ask if the account is tax deferred and only if Yes then ask about RMD.

[ThomasM125]

The RMD issue arises when you have a retirement plan the you have to start taking distributions from when you turn 70 1/2, like a traditional IRA. The IRS requires you to start taking distributions since you deducted the contributions from your taxable income when you made them, so they want that taxable income to be reported and taxed before you die.

So, if you have a company type pension where you start receiving benefits when you stop working and they continue until you die, and you never run out of distributions, then you probably don't have RMD's. But if in doubt, you can ask your pension company if your distributions are required minimum distributions.