Owners of Individual Retirement Accounts must initiate required minimum distributions from their accounts when they reach 70 1/2 years old even if they are not retired, or they will face penalties, reports the Internal Revenue Service. The IRA owners must calculate the amount of the distributions each year.
IRA owners can defer the first required minimum distribution until April 1 of the year after they turn 70 1/2, but they must take the second withdrawal by Dec. 31 of the same year, explains the IRS. For every subsequent year, the distribution must be done by Dec. 31. The penalty for not taking required minimum distributions when necessary is an excise tax of 50 percent of the amount that the IRA owner should have withdrawn. If IRA owners have several accounts, they must calculate the required minimum distributions for each account separately, but they can take the distribution from any of the accounts.
To calculate the required minimum distribution, the IRA owner divides the balance in the IRA as of Dec. 31 of the previous year by life expectancy according to an IRS table. The number of account beneficiaries and the age of the IRA owner's spouse determine the table used for the calculation. Although a retirement plan administrator may assist in the calculation, the IRA owner is responsible for withdrawing the correct amount. IRA owners can withdraw more than the minimum, but the excess does not count toward the next required minimum distribution.