April 1 has a reputation as April Fool’s Day. But for retired taxpayers who turned 70½ last year, it’s time to make a wise financial move.
April 1 is the deadline for retirees to take their first required distributions from traditional IRAs and employee retirement plans. The deadline also applies to SEP and SIMPLE IRAs, but not Roth IRAs, the Internal Revenue Service reminds us.
IRA owners who reached 70½ during 2015 – they were born after June 30, 1944, and before July 1, 1945 – have until April 1 (this Friday) to begin taking their money out. The initial distribution is for 2015; the IRA owner also will have to take a “required minimum distribution” for 2016 by Dec. 31.
The IRS notes that some employees who still are working can wait to make their first withdrawals until April 1 of the year after they retire.
Take a look at IRS Publication 590-B, which spells out the details and contains tables for calculating distributions. It’s available at www.irs.gov.. Trustees of IRA plans also are required to provide a required minimum distribution or to offer to calculate one for retirees, the IRS notes.
Your IRA also has tax implications. Contact us at EricJohn Ltd. to explore them!