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The university benefits claims that since I am in the Traditional pension plan and not contributing to any other account RMD is not required. Is that true?

I have no 403B or other similar accounts. They do deduct money from my paycheck but it's not optional nor is it a self-directed investment. Our benefits office claims RMD does not apply.
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2 Replies
MinhT1
Employee Tax Expert

The university benefits claims that since I am in the Traditional pension plan and not contributing to any other account RMD is not required. Is that true?

If you receive your pension in monthly payments then all payments are considered RMDs. And you are not required to take any other distributions as RMDs.

 

In TurboTax, you can answer that the whole sum received is RMD and that your RMD is equal to the total received. 

 

This way, TurboTax will know that you have satisfied all RMD requirements.

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The university benefits claims that since I am in the Traditional pension plan and not contributing to any other account RMD is not required. Is that true?

"They deduct money"?

 

Are you employed?  Are you retired?  Are you over age 73?

 

An RMD is a required minimum distribution from certain retirement plans.  That means, a withdrawal you take when you are retired.  The basic concept is that if you have a retirement plan, you are supposed to withdraw the money, pay taxes, and use it for living expenses.  You can't just let it sit in the account forever to grow without taxes.

 

If you are not retired and not receiving retirement pay, the idea of an RMD does not enter your life at all.   Why are you asking?

 

If you are retired and receiving payments from a traditional defined benefits pension, the entire pension is considered your RMD.  You don't need to withdraw anything extra, but for certain tax purposes, the pension payment is considered equal to your RMD. 

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