IRS Logo
Print - Click this link to Print this page

Required Withdrawals from IRA - Podcast text script

HI… I’M PHYLLIS… AND I WORK FOR THE INTERNAL REVENUE SERVICE.
   
IF YOU HAVE A TRADITIONAL INDIVIDUAL RETIREMENT ARRANGEMENT… OR I-R-A… YOU KNOW IT’S A GREAT WAY TO DEFER TAXES WHILE YOU SAVE FOR RETIREMENT.
   
BUT YOU CAN’T KEEP YOUR MONEY IN AN I-R-A INDEFINITELY.  
   
YOU’LL HAVE TO START TAKING YEARLY WITHDRAWALS ONCE YOU TURN 70 AND A-HALF.
   
THAT’S SIX MONTHS AFTER YOUR 70TH BIRTHDAY.  
   
THE AMOUNT YOU MUST WITHDRAW EACH YEAR IS CALLED THE REQUIRED MINIMUM DISTRIBUTION.
      
IT IS FIGURED BY DIVIDING YOUR ACCOUNT BALANCE AT THE END OF THE PRIOR YEAR BY A NUMBER THAT’S BASED ON YOUR AGE AND YOUR SPOUSE’S… IF YOU’RE MARRIED.  
   
THAT NUMBER IS CALLED THE DISTRIBUTION PERIOD.
         
YOU CAN FIND THE DISTRIBUTION PERIOD IN THE TABLES AT THE BACK OF PUBLICATION 590… INDIVIDUAL RETIREMENT ARRANGEMENTS.
    
PUBLICATION 590 IS AVAILABLE ON THE I-R-S WEBSITE AT I-R-S-DOT-GOV.
   
NOW… IT’S OK TO WITHDRAW MORE FROM YOUR I-R-A THAN THE REQUIRED MINIMUM DISTRIBUTION … BUT YOU CAN’T WITHDRAW LESS.
   
IF YOU DON’T TAKE YOUR REQUIRED AMOUNT … YOU MAY HAVE TO PAY AN EXCISE TAX…OF 50 PERCENT OF THE PAYMENTS YOU FAILED TO TAKE.
   
TO LEARN MORE… GO TO I-R-S-DOT-GOV-SLASH-RETIREMENT.

Page Last Reviewed or Updated: 20-Feb-2014