Advanced Diploma of Financial Planning (ADFP) Practice Test

Question: 1 / 400

When must annual distributions from qualified retirement plans typically begin?

The year participants turn 65

The year participants turn 70.5

The year participants turn 72

Annual distributions from qualified retirement plans must typically begin in the year participants turn 72, which aligns with changes made to the required minimum distribution (RMD) rules under the SECURE Act. The law adjusted the age for commencing RMDs from 70.5 to 72, acknowledging longer life expectancies and allowing individuals to keep their funds invested for a longer period before mandatory withdrawals begin.

In contrast, the other options refer to ages that are outdated or conditions that do not apply universally to all retirement plans. For example, while 70.5 was the previous age for RMDs, it has been superseded by the current requirement of age 72. Additionally, stating that distributions must begin only upon retirement is inaccurate, as RMDs are based on reaching a specific age rather than retirement status itself.

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Only upon retirement

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