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The Rules of Required IRA Withdrawals
by Kimberly Lankford

I turned 70½ in 2003 and took my first IRA required minimum distribution this past April. A friend told me that I'd have to take another distribution by the end of the year. Is this true?

Your friend is right. You don't need to take your first IRA distribution until April 1 of the year after the year you turn 70½. If you were born January 1, 1933, and turned 70½ on July 1, 2003, for example, you had until April 1, 2004 to take your first withdrawal. But that April 1 deadline is just a special extension for the first year you start withdrawing the money, which means it is considered your 2003 distribution. From now on, you'll have to take your required distribution by December 31 of every year, starting with your 2004 distribution this December.

To calculate how much money you need to withdraw, take the balance of your IRA accounts as of December 31 of the previous year then divide it by the number you'll find in the IRS tables for someone your age. If you're 71 in 2004, for example, the divisor is 26.5. (You'll use a different divisor, however, if your spouse is more than 10 years younger than you and is your beneficiary.) Most people will use the Uniform Lifetime Tables, which you can find on page 97 of IRS Publication 590, "Individual Retirement Arrangements."

Do the same thing the following year, based on the previous year's account balance and the IRS divisor based on your new age (the divisor for a 72 year old is 25.6). You also can use our minimum distribution calculator, which will do the math for you.

These rules only apply to traditional IRAs. You don't need to make any required minimum distributions from Roth IRAs.