Don't Forget to Take Your IRA Required Distribution

We explain when and how much you must withdraw from retirement accounts once you reach a certain age.

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Don't Forget to Take Your IRA Required Distribution
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By Kimberly Lankford

I turned 70½ in June of this year. Do I have to take the required minimum distribution from my IRAs by Dec. 31?

For you and anyone else who turned 70½ this year, you can wait until April 1, 2014, to take the first required distribution, but you'll have to take your second distribution by Dec. 31 of the same year. Anyone older than that will need to act quickly to take your required minimum distribution from your IRAs before the Dec. 31 deadline.

To calculate your required distributions, take the value of each of your traditional IRAs as of the end of 2012 (Roth IRAs aren't subject to required distributions), then divide each one by the IRS life expectancy figure based on your age. See Calculating Your Required Minimum Distributions for details; your IRA administrator can also help.

You need to calculate the required distribution from each IRA separately, but you don't need to take that much from each account. You just need to add up how much you must withdraw from all of your accounts, then take the total amount from one or more IRAs. (Required distributions from 401(k)s, on the other hand, must be taken separately from each account.) But be very careful with your calculations -- the IRS has been cracking down on retirees who don't take their required distributions or don't take the correct amount.

Ted Sarenski, a CPA and financial planner in Syracuse, N.Y., recommends looking at all of your IRA accounts before deciding which ones to tap for your withdrawal.
"If the investments in one account aren't doing as well as the others, you may want to take the withdrawal from that account," he says. Choosing one account for the withdrawals won't affect your tax liability -- you'll owe the same amount no matter which account you tap -- but taking the full amount of your required distributions from one account can help you avoid selling investments in other accounts that you'd like to keep.

Some IRA administrators automatically send you a check for your required distribution from each account before the Dec. 31 deadline. If you plan to take all the money from just one or two accounts, contact your other IRA administrators right away and tell them not to send you the check this year. (Many IRA administrators don't send an RMD check automatically unless you've signed up for an automatic withdrawal program. Vanguard, for example, automatically distributes RMDs if you sign up for its RMD Calculate-and-Distribute Service and choose a date -- or frequency -- for your distributions.)

Contact your IRA administrator as soon as possible. You technically have until the end of business on Dec. 31 to make the withdrawal, but it's a good idea to take action soon, especially if you need to sell investments and wait for the trades to settle before you have enough cash in the account for the withdrawal. TD Ameritrade, for example, recommends contacting the company by Dec. 20 to guarantee distribution by Dec. 31.

Another option for people over age 70½ is to make a tax-free transfer of up to $100,000 from your IRA to a charity. The money transferred counts as your required minimum distribution but is not included in your adjusted gross income (you cannot take a charitable deduction for the money, too). This has been an option for the past several years, but Congress usually doesn't renew the law until the very last minute. Last January, Congress extended the tax-free charitable transfer law through 2013. It helps to set aside even more time for the request to be processed and the charity to cash the check -- Fidelity recommends filling out the forms by Dec. 15.

The money must be transferred directly from your IRA to the charity; you won't qualify for this tax-free transfer if you withdraw the money yourself then give it to the charity (in that case, you can deduct the charitable contribution if you itemize, but the withdrawal will be added to your adjusted gross income). Fidelity, for example, has an IRA one-time withdrawal form with which you can have a check made out to the charity from your IRA, or you can send the charity a check from your IRA if you have check-writing privileges established for the account. See Who Can Transfer IRA Funds to Charity? for details.

For more information about required minimum distributions, see our RMD special report.


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13 Comments

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Massiekur

if you withdraw from your IRA how fast will the check be made out.

December 20 2013 at 11:05 AM Report abuse rate up rate down Reply
jrb359

If you want to KEEP your IRA don't vote for a lieing, decieving, tax and spend Democrat!

December 16 2013 at 6:18 AM Report abuse rate up rate down Reply
freemannc

You're all full of Twinkies smothered with bull butter!

December 15 2013 at 10:46 PM Report abuse rate up rate down Reply
sailfenix

...worked all my life to build a retirement egg. at 72, i have to keep working to have money to live on as social security income and tiny pension added to job income requires almost entire ira distribution to just pay income tax. no point in having a ira. must work until dead on job, live in my camper. rent, insurances, support of non tax-paying freeloaders leaves poverty.

December 15 2013 at 7:18 AM Report abuse rate up rate down Reply
toosmart4u

People the cost of the Iraq war is 8.5 trillion and counting, the cost of the Afthan war is 4.5 trillion and counting. Both wars started by President Bush Jr. Talk about the national debt, most of it came from the bush administration. Now the federal reserve chairman who is printing 85 billion a month is a bush jr. appointee and his term is ending Dec 31st. This is where our national debt came from. GOP

December 15 2013 at 7:01 AM Report abuse +1 rate up rate down Reply
nevadan99

Neither party is any good. Both self serving. Get rid of the lobbyist.

December 14 2013 at 11:14 AM Report abuse +4 rate up rate down Reply
1 reply to nevadan99's comment
M

If anyone has ANY questions about lobbyists, just watch the movie THE DISTINGUISHED GENTLEMAN, and pay attention to the part where Eddie Murphy is in the limo after he wins the election. He tries to talk to someone, but gets interrupted by an aide asking whether he is for, or against, various things...

December 17 2013 at 2:26 AM Report abuse rate up rate down Reply
toosmart4u

Hey jrb359, you have your facts all wrong. You have to learn to think for yourself and not listen to the big money machine of the GOP. Your president bush jr. took out 200 billion to 300 billion out of social security trust fund his last 6 years in office and replaced the money with treasury notes, yup, low interest on s.s. savings. Now your GOP does not want s.s. to cash in these treasury notes, they say they can use the money is another program. You get what you vote for.

December 14 2013 at 8:05 AM Report abuse rate up rate down Reply
1 reply to toosmart4u's comment
jrb359

Did Obama keep his promise yet that when elected he would pull the troops out of Afganistan? You're worried about Bush and $60 billion, and could care less about Obama spending $6.5 trillion. Makes no sense!

December 14 2013 at 11:28 AM Report abuse +3 rate up rate down Reply
1 reply to jrb359's comment
stevendy1

congress controls overseas deployments and how long...afghanistan, Iraq, gitmo--all wanting to be ended or closed by PRESIDENT OBAMA but refused by the republican congress..

December 15 2013 at 12:56 PM Report abuse rate up rate down
toosmart4u

If you are on social security and medicare, or soon to be, thank a democrat. If you want to end these 2 fine programs vote republican. That is the way your GOP representatives voted. Bush jr. put us very far in debt and for many decades to come. We have to pay for all the injured veterans on disability. Needless wars he got us into.

December 13 2013 at 5:54 PM Report abuse +5 rate up rate down Reply
1 reply to toosmart4u's comment
jrb359

BS. Your president has spent $6.5 trillion in 5 years and all we have is a debt of $17.2 trillion, unemployment in the teens, a GDP at 2%, lies, blame, scandals and the worst of all what this president's ONLY goal was Obamacare! If the decieving, lieing, tax and spend Democrats had their way, there would be NO SS or medicare because they would have stolen the money and spent it on stupid social programs and green jobs, and left Senior to find a way to feel themselves!

December 13 2013 at 6:56 PM Report abuse -5 rate up rate down Reply
1 reply to jrb359's comment
jrb359

Correction: last line should read FEED themselves!

December 13 2013 at 6:58 PM Report abuse -3 rate up rate down
Mickylitz

demsrulein2014

Mickylitz,.......When Bush left office he left with the lowest approval rating on record lower than Jimmy Carter's when he left office.
************************************************************************
Do you really base your opinion on approval ratings as nuts as our population has become ?
No wonder the country is in such trouble...
And if you want to compare ratings do it with two terms Presidents !
Carter didn't make it second term..
Here are the first term ratings...

First-Term Averages

President


Dates of first term


Average
approval rating





%

Harry Truman


April 1945-January 1949


55.6

Dwight Eisenhower


January 1953-January 1957


69.6

John Kennedy


January 1961-November 1963


70.1

Lyndon Johnson


November 1963-January 1965


74.2

Richard Nixon


January 1969-January 1973


55.8

Gerald Ford


August 1974-January 1977


47.2

Jimmy Carter


January 1977-January 1981


45.5

Ronald Reagan


January 1981-January 1985


50.3

George H.W. Bush


January 1989-January 1993


60.9

Bill Clinton


January 1993-January 1997


49.6

George W. Bush


January 2001-January 2005


62.2

December 13 2013 at 10:33 AM Report abuse -4 rate up rate down Reply
1 reply to Mickylitz's comment
ga7smi

Kennedy\'s ratings were in the 30% range when he wass murdered - he would have never had a second term

December 14 2013 at 1:47 PM Report abuse -1 rate up rate down Reply