Required Minimum Distributions

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You won’t get a birthday card from Uncle Sam, but the IRS is keen to know when you turn age 70½. That's when it mandates you begin taking required minimum distributions (RMDs) from your tax-deferred accounts such as your 403(b) plan, 457 plan or traditional individual retirement account (IRA).

The required beginning date (RBD) is April 1 of the year after you turn 70½. If you fail to take IRS-specified amount out of your retirement account (based on IRS life expectancy tables), you’ll also likely be socked with a 50% excess accumulation tax. That means you may have to pay 50% of the amount that should have been withdrawn, but wasn't.

When it’s time to take your RMD, see IRS Publication 590: "Individual Retirement Arrangements".

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