Taking a Delayed RMD
I turned 70 1/2 last year but decided to wait to take the required minimum distributions from my IRAs until April 1 of this year. How do I calculate my RMD? Do I have to take another RMD by December?
Use Our Tool: Minimum IRA Distribution Calculator
You have until April 1 of the year after you turn 70 1/2 to take your first required minimum distribution – so the RMD you take by April 1, 2014, counts as your 2013 RMD. Your RMD is basically the balance in your traditional IRAs divided by the IRS life-expectancy figure. For your 2013 RMD, calculate how much you need to withdraw based on the balance in your IRAs as of the end of 2012; your life expectancy is based on your age in 2013. (You also need to take an RMD from your 401(k) starting at age 70 1/2 unless you’re still working for the employer who sponsors the plan.) Your IRA administrator can help you with the calculations. For more information, see Don’t Forget to Take Your Required Distribution and Easy Ways to Calculate Required Minimum Distributions.
You need to calculate how much you must withdraw from each of your traditional IRAs separately, but you can take the money from any of your traditional IRAs. Take care to calculate the required withdrawal amount correctly; if you don’t, you’ll have to pay a penalty of 50% of the amount you should have withdrawn but didn’t. Also give your IRA administrator plenty of time to process the withdrawal. It’s a good idea to request the required April 1 withdrawal by mid March so you don’t miss the deadline.
Keep in mind that you’ll still need to take your 2014 RMD by December 31 of this year. The taxable portion of both withdrawals will count in your adjusted gross income for 2014. If all of your IRA contributions were tax-deductible, then all of your withdrawals are taxable. If you made some non-deductible contributions, then a portion of the withdrawal is considered a nontaxable return of principal. See IRS Publication 590, Individual Retirement Arrangements, for more information.
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