Rocket Dollar Knowledge Base

Are there required minimum distributions (RMDs) for a self-directed IRA or a 401(k) Rocket Dollar account? How do I calculate them?

Yes, this is similar to a Traditional IRA or Traditional 401(k).

What are required minimum distributions?

Required minimum distributions (RMDs) are minimum withdrawal amounts that must be taken annually by the plan or IRA owner. RMDs must begin within the year the plan owner turns 70 ½ years of age, or in the year of retirement if he or she retires after that age. IRA and Retirement plan participants and 401(k) owners are responsible for taking the correct amount of RMDs on time every year or face stiff penalties for failure to do so. Roth IRA and Roth 401(k) owners do not have to take RMDs, as taxes should have already been paid on those contributed dollars.

Calculating your RMDs is a collaborative effort between you and Rocket Dollar.

When are RMD's due? Is there any penalty?

  • Your first RMD at 70 and 1/2 by December 31st of that year and then April 1st for years there after.
  • An inherited IRA owner must take a distribution by the year after the owners death on December 31st
  • If you are late to taking an RMD, you could be subject to penalties from the IRS.