Required Minimum Distributions

Q. What is a Required Minimum Distribution (RMD)?
A. It is an IRS-mandated minimum amount that must be withdrawn annually from a retirement plan. You can withdraw more than the minimum but not less.

Q. Do RMD rules apply to all retirement plans?
A. Generally, yes. They apply to the following: · Traditional IRA · Rollover IRA · SIMPLE IRA · SEP IRA · 401(k) · profit sharing · money purchase pension · 403(b) · Section 457

Q. Am I required to take an RMD from my Roth IRA?
A. No, because the RMD rules do not apply to Roth IRAs.

Q. To avoid paying taxes on my RMD, can I roll the Funds to an IRA or another retirement plan?
A. No.

Q. What if I do not take my RMD in a timely manner?
A. Then you will be required to pay the IRS a 50% penalty tax on the taxable portion of your distribution that was not taken.

Q. Is there an exception to taking an RMD from an IRA?
A. No.

Q. Is there an exception to taking an RMD from an employer-maintained retirement plan?
A. Yes, but only if an employer's plan document has language stating that RMDs are not required for current employees who are 70 ½ or older. This exception does not apply to a current employee who is 70 ½ or older and owns 5% or more of the company.

Q. How is an RMD calculated?
A. Simply put, you divide your December 31 account balance by your life expectancy. For example, if your December 31 balance is $2,740 and your life expectancy is 27.4 years (obtained from an IRS life expectancy table), your RMD would be $100.

Q. Describe how the new calculation rules work.
A. Regardless of whether or not you have a beneficiary on your account, you determine your life expectancy as the joint life expectancy of you and an individual exactly 10 years younger. To determine what this number is, you use the IRS Uniform Lifetime Table. If you turn age 70 in the same year that you turn age 70 ½, use 27.4. If you turn age 71 in the same year that you turn age 70 ½, use 26.5. A portion of the table, which can be found in IRS Publication 590, is listed below:

Age	Life Expectancy
70	27.4
71	26.5
72	25.6
73	24.7

Q. Will the IRS permit me to calculate my RMD in any other way?
A. Yes, but only if the beneficiary on your account is your spouse and your spouse is more than 10 years younger than you.

Q. Will Sit Mutual Funds calculate my RMD for my Sit IRA?
A. Yes. Just give us a call at 612-359-2554 or 800-332-5580.

Q. When do I have to take my first RMD?
A. You should begin taking RMDs in the year in which you turn age 70 ½. If the first RMD is not taken during that year, you must take it no later than April 1st of the following year. If postponed until April 1st, two distributions must occur in one year. For example, Dexter turned 70 ½ on March 10, 2007. He should take his first RMD by December 31, 2007. If he doesn't, he must take it by April 1, 2008 and then must take his second RMD by December 31, 2008.

Q. Am I required to take an RMD from each IRA I own?
A. No, but the amount of the RMD from each IRA must be individually determined. Then, if you wish, you can withdraw the total RMD from as few or as many IRAs as you would like. For example, Jane is over 70 ½ and has a Traditional IRA at a bank, a Rollover IRA at a discount broker and a SIMPLE IRA at Sit Mutual Funds. Her RMD from each IRA is $1,000, $2,000 and $3,000, respectively. She can withdraw her total RMD of $6,000 from one, two or all three of her IRAs.

Q. Am I required to take an RMD from each employer-maintained retirement plan I have money in?
A. Yes. For example, Charlie is retired and has money in his 401(k) plan with his first employer and in his profit sharing plan with his second employer. He must take an RMD from each plan.