Did You Turn 70 ½ Last Year? Or Do You Know Someone Who Turned 70 ½ Last Year? If so, April 1st is not a date to fool with!

If you were age 70 ½ last year (2013), then April 1, 2014 is an important deadline for taking your 2013 IRA required minimum distribution (RMD). Our friends at the IRS call this April 1st deadline as your required beginning date (RBD).

The year you turn age 70 ½ is the year you must start taking RMDs from your IRA. This rule applies to all of your traditional IRAs, including any SEP or SIMPLE IRAs.

If  you were age 70 ½ last year (2013) then 2013 is the first year you must take an RMD. However, the deadline for actually taking your age 70 ½ year IRA RMD is April 1 of the following year (April 1, 2014). All RMDs for years after the “70 ½ year” must be taken by December 31st of that year.

In English, the RMD for your age “70 ½ year” is the only distribution that can be delayed until April 1st of the next year. If you were age 70 ½ last year and you did not take your 2013 RMD, then you’ll have to take two RMDs in 2014 (and the first one needs to be taken by Tuesday, April 1.  If you don’t take your “70 ½ year” IRA RMD by Tuesday, or you don’t take enough of it by then, you’ll be hit with a 50 % penalty. For example, if your RMD for 2013 was $1,000 and you didn’t take any of it by April 1st, then the penalty is $500 ($1,000 shortfall times 50% equals $500 penalty).