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A minimum required distribution is the smallest amount you can take each year from your retirement savings plan once you've reached the mandatory withdrawal age.

There are MRDs for 401(k) plans, 403(b) plans, and traditional IRAs, and the maximum age you can reach before they start is usually 70 1/2. If you take less than the required minimum, you owe a 50% penalty on the amount you should have taken.

You calculate your MRD by dividing your account balance at the end of your plan's fiscal year - often December 31 - by a distribution period based on your life expectancy. If your spouse is your beneficiary and more than ten years younger than you are, you can use a longer distribution period than you can in all other circumstances.

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