What is the required minimum distribution once I reach age 70 1/2?
The minimum amount you must withdraw from your SEP/SIMPLE/traditional IRA (not a ROTH IRA), or 401(k), profit-sharing, 403(b), or other defined contribution plan each year is called your Required Minimum Distribution (RMD).
You may NOT be required to take a RMD from a qualified plan the year you turn 70 ½.
A participant must begin to receive distributions from his or her qualified retirement plan by April 1 of the first year after the later of the following years.
- Calendar year in which he or she reaches age 70½.
- Calendar year in which he or she retires from employment with the employer maintaining the plan.
However, the plan may require the participant to begin receiving distributions by April 1 of the year after the participant reaches age 70½ even if the participant has not retired.
If you delay the first distribution until the following April 1st, you'll have two distributions that year, as the second distribution is due by December 31st.
You can avoid including income from both of these distributions in the same year if you take your first RMD withdrawal by December 31st of the year you actually turn 70½.