If you have money in a traditional IRA, a 401(k) or 403(b) plan, you normally must begin to take money out by April 1 of the year following the year in which you turned 70 ½.  Could not Congress have used simpler language?   

If you follow those directions exactly, there is a good chance that you will have to take two distributions in one year and that can have unintended tax consequences.  More often it is best to begin to take the money out in the year that you turn 70 ½. 

The calculation is rather simple.  You take the account balance as of December 31 of the prior year and divide by the number shown in the distribution period for your age in the current year.

If today was March 31, 2016, and you were born May 14, 1946, this is what you would do.

1-         Take account balance as of 12/31/2015

2-         Determine your age in the year that you are taking the distribution for.  In this example, you are 70 years young
3-         Look at the table for your age (70) and the divisor, which is 27.4  Divide your account balance by the divisor and that is the Required Minimum Distribution.  

You may aggregate all of your IRA accounts and take the amount from one, or divide it among them.  If you are taking money from 401(k) accounts, you must determine and withdraw the RMD from each one.








New IRA Table
Look up your Divisor
Age Applicable
divisor
Age Applicable
divisor
Age Applicable
divisor
70 27.4 86 14.1 102 5.5
71 26.5 87 13.4 103 5.2
72 25.6 88 12.7 104 4.9
73 24.7 89 12.0 105 4.5
74 23.8 90 11.4 106 4.2
75 22.9 91 10.8 107 3.9
76 22.0 92 10.2 108 3.7
77 21.2 93 9.6 109 3.4
78 20.3 94 9.1 110 3.1
79 19.5 95 8.6 111 2.9
80 18.7 96 8.1 112 2.6
81 17.9 97 7.6 113 2.4
82 17.1 98 7.1 114 2.1
83 16.3 99 6.7 115+ 1.9
84 15.5 100 6.3
85 14.8 101 5.9

Taking Your Required Minimum Distribution


Morris Armstrong, EA

Tax PREPARATION and REPRESENTATION