When should I take my first IRA distribution?

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Q. Regarding Required Minimum Distributions (RMDs), I understand the first year for distributions has been moved from the year one turns 70.5 to 72 years old. However, all the published tables, even with IRS, start at 70.5, not 72 years old. Has this gone back to the first distribution being when you turn 70.5?
— Confused

A. You’re correct that the SECURE Act, short for the Setting Every Community Up for Retirement Enhancement Act of 2019, changed the RMD rules.

Individuals who turned 70.5 years old in 2019 stayed under the old RMD rules.

But individuals who turned 70.5 years old starting in 2020 or later are required to take their first RMD no later than April 1 the year after they turn age 72, said Michael Maye, a certified financial planner and certified public accountant with MJM Financial in Gillette.

“As a planning point, most individuals will want to take their first RMD the year they turn 72 to avoid having to take two RMDs that first year — the one from the prior year which must be taken by April 1 plus the current year RMD which must be taken by Dec. 31,” he said.

For individuals who are required to start taking their RMDs at age 72 under the SECURE Act, they would simply use the age 72 divisor from the appropriate IRS table, Maye said.

For example, if someone was using the IRS Uniform Lifetime Table that would be 25.6, he said.

The good news is that most custodians where the IRA or retirement account is held can calculate the RMD for you, he said.

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This story was originally published on June 9, 2021.

NJMoneyHelp.com 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.

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