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Required Minimum Distributions
Money Minute
The IRS requires that you withdraw a minimum amount from your retirement plan when you reach a certain age. How can you avoid penalties for failing to take your minimum distribution?

Perhaps you’ve been a conscientious saver, sheltering money in your retirement plan or a traditional IRA for years, and enjoying the tax deferral benefits. However, by the time you reach age 70 ½ you have a special rule to pay attention to: it’s called the required minimum distribution.

Just as it sounds, the IRS requires1 that you withdraw a minimum amount starting when you reach 70 ½. The exact dollar amount of the minimum distribution is determined based on the value of your retirement accounts and your life expectancy. Your plan administrator, or financial firm, may calculate the minimum distribution for you, and may set-up a recurring, automated withdrawal for you each year. This will ensure that you avoid IRS penalties for failing to take your minimum distribution.

Once you have your withdrawal schedule set up, you can return your focus to more important things — like enjoying your golden years.

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