If you’re ready to begin taking your RMDs, follow these six easy steps.
- Step 1: Gather Your Account Information
- Step 2: Calculate Your RMD
- Step 3: Choose the Account(s) for Your Withdrawals
- Step 4: Choose the Timing for Your Distribution
- Step 5: Decide Where Your Distribution Will Go
- Step 6: Decide if You Want Taxes (Federal and Possibly State) Withheld From Your Distribution
Remember, in one quick call a T. Rowe Price retirement specialist can help you set up a free RMD program that is automatically updated annually.
Or, you can set up your program via the RMDNavigatorSM online tool. The choice is yours.
If applicable, balances from your T. Rowe Price Savings Bank IRA Certificate of Deposit (CD) account may also be included in the calculation.
Gather your most recent year-end statements for each T. Rowe Price retirement account you want to include in your RMD calculation.
If you are the account owner, have all your retirement assets invested entirely at
Divide your account balance on December 31 of the previous year by your appropriate age-based factor for the calculation year.
Remember that if you have assets “in transit” on December 31 of the year prior to your calculation year (e.g., 2007, for your 2008 RMD), they must be included in the balance of the receiving account.
Although you must include balances from all your accounts in your calculations, once you have determined your total combined RMD amount, you may withdraw that amount from any one, or any combination, of all of your accounts of the same type.
This includes any balances you hold in a T. Rowe Price Savings Bank IRA Certificate of Deposit. Note that while normally there would be an early withdrawal penalty for withdrawing from a CD before its maturity, when the withdrawal is to satisfy an RMD, no penalty would be imposed.
In most cases, you can defer only your first RMD payment to April 1 of the year after you turn 70½. If you choose to take your first RMD in the year after you turn 70½, you will still have to take your second RMD (the RMD for that calendar year) before December 31 of that same year. T. Rowe Price’s Retirement Specialists can provide information to help you understand your options, but you should also consult your tax professional to determine which is most advantageous for you. You may elect to receive your RMD monthly, quarterly, semiannually, or annually.
You have four options for receiving your distribution:
- Transfer into an existing T. Rowe Price nonretirement account
- Set up a new T. Rowe Price nonretirement account
- Electronic transfer to your bank account
- Payment by check
Make sure your personal and banking information is current by accessing your accounts online and clicking My Profile.
We are required to withhold federal income tax from your distribution unless you elect not to have withholding apply. You may change this election at any time.
In most cases, unless you indicate otherwise, federal income tax will be withheld at a rate of 10%. You may elect not to have income tax withheld from your distribution, and you may also request to have more than 10% withheld. Many retirees choose to have withholding apply. Consult a tax advisor to determine which option is best for you.
Some states require us to withhold state taxes if federal taxes are withheld from the distribution. If you elect not to have federal taxes withheld, or you do not reside in a mandatory withholding state, state taxes will not be withheld from your distribution. Consult a tax advisor or the applicable agency within your state to determine which rules apply to you.
Feedback