Required Minimum Distributions Q&A


Give and it shall be given to you; good measure, pressed down, and shaken together, and running over, shall men give into your bosom. For with the same measure that ye mete withal it shall be measured to you again.

Luke 6:38

These questions and answers are practical, not biblical, but until we reside in heaven we need to keep apprised of the realities of this world.

Q: What is the RMD (Required Minimum Distribution)?

A: Your required minimum distribution is the minimum amount you must withdraw from your account each year. You generally have to start taking withdrawals from your IRA, SEP IRA, SIMPLE IRA, or retirement plan account when you reach age 72. Roth IRAs do not require withdrawals until after the death of the owner.

Q: Can I give my 401(k) RMD to charity?

A: No. You can only make the tax-free transfer from an IRA, not from a 401(k).

Q: Did the age for RMD Change?

A: Yes, The SECURE (Setting Every Community Up for Retirement Enhancement) Act, passed in 2019, made a big change to RMD requirements by extending the age from 70½ to 72.

Q: What is the penalty for missing a RMD?

A: The penalty for skipping a required minimum distribution is 50% of the amount that should have been withdrawn.

Q: What is the advantage of giving my entire RMD or a portion of my RMD to Zion or another charity?

A: In 2015, the IRA direct charitable rollover gift option became permanent. The law allows people over the age of 72 may make a gift to their church directly from their IRA, which counts toward their required minimum distribution, without including the distribution as personal income so they will not be responsible for taxes on that amount.

Q: Can I withdraw the money from my IRA and then write a check to charity, or do I need to transfer the money directly?

A: The tax-free transfer won’t count if you withdraw the money from the IRA first and then make a contribution to the charity. You can take a charitable deduction for your contribution in that case, but the IRA withdrawal will be included in your adjusted gross income.

You need to transfer the money directly from the IRA to the charity for it to count as the tax-free transfer. Ask your IRA administrator and the charity about making a direct transfer, or you can have the IRA administrator send a check from your account to the charity.

Q: I will be 72 in a few months. Can I give my RMD to charity now?

A: Even though you can take your RMD anytime during the year you turn age 72 (or until April 1 of the year after you turn 72), you have to wait until you actually turn age 72 to make the tax-free transfer to charity.