When should I make my first IRA distribution?
Q. Regarding the Minimum Required Distributions (RMD), I understand that the first year for distributions has been moved from the year you reach 70.5 to 72. However, all published tables, even with the IRS, start at 70.5, not 72. Does it go back to the first cast when you hit 70.5?
A. You are correct that the SECURE Act, short for Setting Every Community Up for Retirement Enhancement Act of 2019, changed the rules of RMD.
People who turned 70.5 in 2019 remained under the old RMD rules.
But people who turned 70.5 from 2020 or later are required to take their first RMD no later than April 1 of the year after age 72, said Michael Maye, chartered financial planner. and Chartered Accountant at MJM Financial in Gillette.
“As a planning point, most individuals will want to take their first RMD in the year of their 72nd birthday to avoid having to take two RMD this first year – the one from the previous year which must be taken before the 1st. April plus the current year RMD which must be taken by December 31, ”he said.
For people who need to start taking their RMDs at age 72 under SECURE, they would simply use the 72-year divisor from the appropriate IRS table, Maye said.
For example, if someone used the IRS Uniform Lifetime Table, it would be 25.6, he said.
The good news is that most of the custodians where the IRA or retirement account is held can calculate the RMD for you, he said.
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Karin Price Mueller writes on Bamboo column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Register for NJMoneyHelp.com‘s weekly electronic newsletter.