Required Minimum Distribution

Traditional Individual Retirement Account (IRA) owners who are 70 ½ years of age or older must take their annual Required Minimum Distribution (RMD) before the end of the year.* If you miss this deadline, the IRS can impose a 50% penalty tax on the amount that should have been distributed.

*Exception: In the year you turn 70½, you are required to take your first RMD by April 1 of the following year.

Reporting to the IRS

By law, we must report to the IRS that a distribution may be required from your IRA. Here’s what you need to know about the process:

  • IRS Form 5498 (“the form”) for each year will be mailed to you on or before May 31 of the following year.
  • If Box 11 of the form is checked, you must take an RMD by December 31 of the year in which you receive the form, or by April 1 of the following year, if the exception above applies. For example, if the form is received in May 2017 with Box 11 checked, you are required to take an RMD by December 31, 2017, or by April 1, 2018, if the exception above applies.

Please note: There are circumstances in which an RMD may be required even if the 5498 box is not checked; please consult your tax preparer if you have questions.

Calculating Your Distribution 

Need help calculating your RMD? Call our Client Service Representatives, and they will calculate your amount for you. Distribution amounts are determined using the IRS Uniform Lifetime Table, unless your spouse is your sole primary beneficiary and is more than ten years younger than you. In this case, the distribution is based on the Joint and Last Survivor Table. Both tables are available online in IRS Publication 590-B at IRS.gov or you may request the information by calling the IRS at 1-800-829-3676.

Please note:

  • If you are currently receiving your RMD automatically, no action is required unless:
    • Any of your IRA shares converted from Class B to Class A during the previous year; and/or
    • You are invested in the Kaufmann Fund Class R shares.
  • If you are a Federated Kaufmann Fund Class R share investor:
    • Please include the 0.20% redemption fee when calculating your RMD.
    • If not included, your RMD will be less than the required amount and subject to a penalty.

Systematic Withdrawal Program

You may have your distribution automatically sent to you annually or deposited into your bank account by setting up a Systematic Withdrawal Program (SWP). To establish an SWP for your IRA account:

 

Federated Securities Corp. is the distributor of the Federated Kaufmann Fund.

IRA RMD Deadlines

To avoid an IRS penalty, take distributions before December 31.

For those taking their first IRA distribution, the deadline is April 1 of next year.

Related Information

Questions?

Contact Us, and our Client Service Team will assist you.