Can I take my Required Minimum Distribution early?


Q. I turn 70 in May of this year. Can I take the Required Minimum Distribution any time during the year or do I have to wait until 70 1/2 to meet the requirement and avoid any penalties?
— Still working

A. Happy early birthday!

You don’t have to wait.

Withdrawals can be taken from retirement accounts without penalty any time after age 59 ½, said Deva Panambur, a fee-only planner with Sarsi, LLC in West New York and an adjunct professor of personal finance at Montclair State University.

Just remember the withdrawals will be included in your taxable income for the year.

Also, because you turn 70 in 2020, you’ll benefit from new legislation — the Setting Every Community Up For Retirement Enhancement Act — called the SECURE Act for short.

“Starting in 2020, owners of retirement accounts must take the Required Minimum Distribution (RMDs) anytime in the year they turn 72, with a deadline of April 1 the next year,” Panambur said.

But, he notes, if you take the RMD the year after turning 72, then you will have to take two RMDs that year — one before April 1 for the year you turned 72 and one for the year you turn 73 — and this you can take any time during the year, he said.

Also note owners of 401(k), 403(b) and similar non-IRA based employee retirement accounts do not have to take any RMD if they are still working and are not 5% or more owners of the company that’s sponsoring the retirement plan, he said.

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This story was originally published on Jan. 31, 2020. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.