The IRA Required Beginning Date

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A traditional IRA is a tax deferred investment; however, tax deferral cannot continue forever. At a certain point, Internal Revenue Code Section 401(a)(9) requires distributions to begin.

General

1. The required beginning date for owner's of traditional accounts is April 1 of the year after the accountholder reaches the age of 70 1/2. This is the latest date that distributions can begin without a penalty.

2. The rule extending the required beginning date for qualified retirement plans to the later of April 1 of the year after the employee reaches the age of 70 1/2 or April 1 of the year after an employee retires does not apply to required distributions from traditional accounts.

3. There is no required beginning date for owners of Roth accounts since distributions from these accounts are not required to be taken by the owner.

The 70 1/2 Year

1. From a birth date standpoint, June 30 is the key date.

2. If an individual’s 70th birthday is on or before June 30, then that individual will be 70 1/2 in the year of his or her 70th birthday.

3. Accountholders born after June 30 won’t reach 70 1/2 until the year after their 70th birthday.


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