Once you're age 70 1⁄2, tax laws require you to begin taking distributions from your traditional IRA. The amount that you are required by law to withdraw from your account in any given year is called your required minimum distribution.
- If you reached 70 1⁄2 this year, you must take your first distribution by April 1 of next year.
- If you reached 70 1⁄2 before this calendar year, then you must take your subsequent distributions by December 31 of each year.
The minimum distribution rules apply to the total of all your traditional IRAs, including those invested in the Northern Funds and those invested with other institutions. Once you have determined the distribution amount, you can then decide from which investment/investments to elect the distribution. You can have the distribution made entirely from one investment or you can spread the distribution across all your IRAs. Northern Funds will not make a distribution without your direction.
Calculating Your Distributions
The IRA Distribution Calculation Worksheet will help you determine the minimum distribution amount you must take. Please remember to include all Traditional, SEP and SIMPLE IRA accounts, but not Roth IRA or Education Savings Accounts. To complete the worksheet, you'll need to refer to the life expectancy tables. If your sole beneficiary is a spouse more than 10 years younger, use the Joint Life and Last Survivor Expectancy Table. Otherwise, use the Uniform Table.
Taking a Distribution from Your Northern Funds IRA
If you decide to take your distribution from your Northern Funds IRA account, you may reinvest it in a Northern Funds non-IRA account. Although you will have to pay income taxes on the distribution, reinvesting gives your investment the opportunity for additional growth potential. You may want to contact a tax advisor to determine the best option for your particular situation.
To take a distribution from your Northern Funds IRA account or to change your existing automatic distribution choice, please complete the IRA Distribution Request Form. Please note that for your convenience, you may also withhold taxes on the distribution, as indicated on the Form. If you choose to reinvest your distribution in an existing Northern Funds account, select the appropriate option on the Form and return it to:
P.O. Box 75986
Chicago, IL 60675-5986
If you're reinvesting into a new Northern Funds account, you'll need to also include a New Account Application. You can obtain an application, as well as a prospectus and summary prospectus, from this Web site or by contacting the Northern Funds Center at 800/595-9111. The prospectus and summary prospectus contains more complete information, including management fees and expenses. Please read the prospectus and summary prospectus carefully before you invest or send money.
If you have any questions about your required minimum distribution, our Northern Funds Center representatives will be delighted to assist you. They're available at 800/595-9111 weekdays from 7:00 a.m. to 5:00 p.m. Central time.