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You must begin taking distributions from an IRA (including a SIMPLE IRA, but not a Roth IRA) no later than April 1st of the year following the year in which you reach age 70-1/2. For any year after you reach age 70-1/2, you must take the minimum distribution by December 31st of that year. There's an exception to this rule for Roth IRAs, which carry no mandatory distribution requirements.
The amount of your mandatory distributions must be calculated under a formula prescribed by the IRS. If you take less than the required distribution, the penalty for taking too small a distribution is a 50 percent excise tax on the amount not withdrawn as required. You can always take more than the required amount (assuming you're over age 59-1/2) but the extra withdrawals don't count toward your minimums for future years.
|Uniform Distribution Period Table for
Determining Required Lifetime Minimum Distributions
|Age of Individual||Number of Payout/Distribution Years|
|115 and older||1.9|
One simple and uniform table allows most participants to determine the required minimum distributions. The table should be used only by the owner of an IRA who is unmarried, married to a spouse not more than 10 years younger, or whose spouse is not the sole beneficiary. Thus, the IRA owner determines the required annual distribution by:
By using the uniform distribution period table, most participants will be able to determine their required minimum distribution for each year based on just their current age and the account balance as of the end of the prior year.
IRA trustees are required to provide account holders with a statement of their year-end account balances by January 31. In addition, the trustee is also required to state the amount of the required distribution and the date by which such amounts must be distributed. This is great news for IRA holders because it will relieve them of the burden of making mandatory distribution calculations and staying in compliance.