When you reach age 70 1/2, the government requires you to begin taking minimum amounts from your retirement accounts. These Required Minimum Distributions (RMDs) are generally due by December 31 of each year. However, your first distribution can be delayed until April 1 of the year following the year that you turn 70 1/2. With that date rapidly approaching, I wanted to give a quick reminder to any of you who may be affected because the penalties for failing to take your RMD are steep. Any amount that should have been withdrawn that wasn’t is taxed at 50%.
For those affected, I have attached worksheets below to help you calculate your RMD. You should work closely with your tax and investment advisers to ensure that you take the proper amount each year.