Financial Advice Q&A

Occasional Visitor
Posts: 1
How does my first IRA RMD work?
[ Edited ]

I turned 70 on 26 JUL 2013. Am I correct in assuming that since I do not turn 70 1/2 until JAN 2014, I'm not required to take my first RMD until 01 APR 2015? Thank you!

Posted: 2013-12-03 11:00 AM
Other Answers: 1
Community Manager
Posts: 1,009

This could be the shortest answer I’ve ever given – Yes, you are correct!


Okay, I can’t just let it go at that. While you are indeed correct, if you’re interested in learning more, here are some additional details regarding IRA Required Minimum Distributions (RMDs) you should probably know.


  • Waiting means taking two: While the IRS does permit IRA owners to delay taking their first RMD until April 1st following the year in which they 70 ½ - for you that would be April 1, 2015 - doing so will mean that you’ll have to take 2 distributions that year. Depending on your other taxable income and the size of your distributions, this may be no big deal, but it could be better to spread them out.


  • Calculate for all, take from wherever: An IRA owner must calculate the RMD separately for each IRA that he or she owns, but can withdraw the total amount from one or more of the IRAs. In other words, a withdrawal from each IRA isn’t necessary as long as the total required distribution is taken.


  • You don’t have to wait until 70 ½: All IRA distributions during your 70 ½ year will count toward your RMD, even if they were taken prior to you turning 70 ½.


  • No carryovers: Even though withdrawing more than you’re required to take will reduce your balance subject to RMD for next year, you can’t count this year’s excess distribution as next year’s required distribution.


  • Not automatic: Because you’re not required to take IRA RMDs from each account (see above), many IRA custodians will not automatically send you your RMD.


  • Take it or pay: Failure to withdraw the required amount will result in a penalty equal to 50% of the amount that was required to be withdrawn but wasn’t.


  • Company plans and IRAs not the same: Even though employer-provided plans like 401(k)s are also subject to RMD rules, you cannot combine your required withdrawals for the two types of plans. They must be computed separately and withdrawn separately. In other words, you cannot withdrawal money from an IRA to satisfy the requirement for a 401(k) or vice versa.


Finally, if you’d like to learn even more about IRA RMDs, I encourage you to check out the source of the information I’ve provided above.  All of the rules are outlined in IRS Publication 590.  As you first get started on this, you may also find it beneficial to engage the services of a CPA or other qualified income tax advisor.



Thanks so much for your question. I hope this helps and I wish you all the best!




Posted: 2013-12-04 08:13 AM


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