Rules for Taking Distributions From IRA at Age 70 1/2

If your spouse is more than 10 years younger, you must use a different calculation chart.

Old couple sitting on a bench, watching at the landscape image by Eric Isselée from

One minute, you’re 50. Next minute, you’re identifying with the song “100 Years” by Five For Fighting. To make matters worse, the person you see in your mirror doesn’t square with the chart you’re reading that reminds you it’s nearly time to start taking mandatory IRA withdrawals. Bummers on all accounts, but since you have no other choice, keep things uncomplicated by learning retirement money withdrawal rules so you benefit from the cash you worked so hard to earn.

About IRA Retirement Plans

When the government sanctioned tax sheltered retirement plans, guidelines included stringent early withdrawal penalties so workers experiencing financial problems couldn’t withdraw funds on a whim. IRA plans differ, as do early withdrawal rules. But one constant remains: take money out before you are 59 1/2 and you’ll pay for the privilege. The penalty for early withdrawal is 10% of the taxable amount of your withdrawal. If you’re forced to quit work at 55 or become disabled, you won’t be penalized as much. There are no penalties for rolling over funds into a different IRA.

Required Minimum Distribution

Celebrate your 70th birthday and you have six months before you are required to start removing funds from your retirement account. You can also use the IRS anniversary of “no later than April 1 of the following year” as your benchmark. The government calls this process of annual distribution taking Required Minimum Distribution (RMD). You must make a withdrawal every year from your IRA(s) until you either pass away or your funds run out. If the annual distribution you withdraw is less than the required amount, expect to be taxed equal to 50 percent of the money you didn’t take.

The Amount Changes Every Year

The Uniform Lifetime Table is a chart that calculates life expectancy and it’s used by actuaries, statisticians and government officials to calculate minimum distributions at specific ages as they apply to people over the age of 70 1/2. The government tells you how much you are required to withdraw each year once you have passed that anniversary. Having a "percentage of withdrawal amounts” chart at your disposal is the safest way to make sure you take your required IRA distribution amount each year.

IRS Rules

According to the Internal Revenue Service, your RMD is determined by dividing the adjusted market value of your IRA as of December 31 of the preceding year by the distribution period that corresponds with your age in the Uniform Lifetime Table. There’s also a Joint Life and Last Survivor Expectancy Table. You’re required to use that (Table II in IRS Publication 590) if your spouse is more than 10 years younger than you and she is your only beneficiary, since withdrawal amounts are based on joint life expectancy. An IRS rule also lets beneficiaries take withdrawals over time, so you don’t have to worry about emptying your IRA during retirement.

Multiple IRAs Require a Little Finesse

Ok, so you’re enjoying all aspects of your retirement, then the IRS comes along and makes you responsible for figuring out the RMD for each retirement fund you have built over time. Taking distributions from multiple IRAs might seem daunting, but the IRS has made provisions for this type of situation. You can aggregate all of your retirement accounts and withdraw money from just one, as long as that amount represents the total amount of individual withdrawals you would have taken had you tapped each account separately.

How to Figure Your Distribution

Download a current IRA distribution chart from the IRS website. Find your age and corresponding distribution period on the table. Divide the distribution period figure by the value of your retirement account(s) to come up with the withdrawal percentage that determines the amount of your withdrawal. Elder Law Attorney Robert Clofine offers this example: You have $50,000 in IRA funds. Divide that amount by your age at years' end, come up with a divisor that totals your minimum distribution for the year, and request a check. Better yet, have your accountant calculate each year's withdrawal amount so you can get on with your retirement plans.