Required Minimum Distributions (RMDs) generally are minimum amounts that a retirement plan account owner must withdraw annually starting with the year that he or she reaches 70 ½ years of age or, if later, the year in which he or she retires.
Beginning date for your first required minimum distribution
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- IRAs (including SEP and SIMPLE IRAs)
April 1 of the year following the calendar year in which you reach age 70½.
Date that you turn 70½
You reach age 70½ on the date that is 6 calendar months after your 70th birthday.
Example: You are retired and your 70th birthday was June 30, 2013. You reached age 70½ on December 30, 2013. You must take your first RMD (for 2013) by April 1, 2014.
Example: You are retired and your 70th birthday was July 1, 2013. You reached age 70½ on January 1, 2014. You do not have an RMD for 2013. You must take your first RMD (for 2014) by April 1, 2015.
I turn 70 1/2 during March 2015. Can the rmd be taken anytime in year you turn 70 (2015) or must it be on a date after turning 70.
I have CDs due in January and would like to make the withdrawal then.
The 70.5 date is merely a deadline. You can begin making withdrawals without penalty once you reach age 59.5.
AS for transferring an ira,
If I have the check sent to me and then send it to another bank within 60 days , can this only be done once per year, all other transfers that year have to be bank to bank.
I agree, but since he would make the withdrawal in January 2015 before he turns 70 1/2 in March 2015 would it count towards the initial year RMD that he has to take?
I'd think so, otherwise this same concern would apply to anyone who begins RMDs during, say, their 60s.
So I could have the check made out to the other bank, sent to me, then I send it to the other bank. As many times as I want.
(I have had some issues with just letting the banks transfer it to another bank)
Thanks to Pb4uski for posting the rules for RMD's. I used to look at just the RMD tables and think the age 70 distribution applies to the year I turn 70.
Example: if I turn 70.5 on March 1 2016, I don't actually have to take out the distributions for age 70 until I am into the tax year 2017 (before April 1 2017). So the bump up in income will occur for the tax year 2017 not 2016.
Does this example sound right?
BTW, the link to the IRS site did not seem to work. This works:
Retirement Topics - Required Minimum Distributions (RMDs)
My example was different. I'll try to make it clearer here:Yes, but you would need to also take a 2017 RMD too so you would double up on your income since your 2017 RMD would need to be done in 2017.
I'm no expert on this, but as I understand it, if you turn 70.5 on March 1, 2016 then any distribution taken from January 1, 2016 to April 1, 2017 will count towards your "2016" distribution. However, you must also take another RMD in 2017, so if you wait until 2017 to take that first year (2016) RMD then you'll double up your income subject to tax in 2017 since the RMD is taxed in the year you receive it.
I'm not sure why they make it so complicated, but they do.
My example was different. I'll try to make it clearer here:
1) Turn 70 on March 1 2016
2) Turn 70.5 on Sept 1 2016 (now we must take RMD before next April 1)
3) Turn 71 on March 1 2017
4) Take 1st RMD in early 2017, before April 1 2017
5) Pay 2016 taxes before April 15 2017 (no RMD's were taken in 2016)
6) Pay taxes on first RMD (from #4) in 2018
I think I just got another year's grace if this is correct.