Though you can withdraw from your traditional
IRA
without penalty anytime after you turn 59 1/2, you don’t
have to begin mandatory withdrawals — officially known as
minimum required distributions
(MRDs)
— until the year following
the year you turn 70 1/2.
When you reach that milestone, you must calculate
the correct amount of your distribution by dividing your account
balance at the end of the previous year — usually but not
always December 31st — by a uniform withdrawal factor that’s
based on your life expectancy. For example, at age 70, you divide
by 27.4, at age 71, you divide by 26.5, and at age 72, you divide
by 25.6. (The number gets smaller as you get older, but not a
full year smaller for each year you age.)
The
custodian
of your account will report
your account balance, and you can find your withdrawal factor
in IRS publication 590 or from your financial or tax adviser.
You have until the following December 31st to withdraw the correct
amount, though you can take the money on any schedule that suits
you.
