What Are the Rules for Minimum IRA Distributions?


Quick Answer

Owners of standard Individual Retirement Accounts must initiate required minimum distributions from their accounts by the time they turn 70 1/2 or face penalties, reports the Internal Revenue Service. Roth IRA accounts have different rules, and distributions are not required until after the owner's death.

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Full Answer

The IRA owner can delay withdrawal of the first distribution without penalty until April 1 of the year after he turns 70 1/2, but then must make the second distribution by December 31 of the same year, explains the IRS. Each year after, the account owner must make a required minimum distribution by December 31 or face a 50-percent excise tax penalty on the amount that he should have withdrawn. The IRA owner calculates the distribution by dividing the balance in the account as of December 31 of the prior year by his life expectancy factor based on an IRS table. He must make a new calculation each year. Although an IRA plan supervisor can assist with the calculation, the account owner is responsible to withdraw the correct amount.

Someone who owns several IRAs must calculate the required minimum distribution of each of them individually, but he can withdraw the total distribution amount from one or any of them, the IRS points out. If the account owner withdraws more than the minimum, he cannot apply the excess to future required minimum distributions.

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