IRA minimum distributions--timing

<p>A loved one will be turning 70.5 at the end of this calendar year & retiring as well. Any suggestions about timing his IRA minimum distributions? I believe she MUST start taking them beginning 12 months after she turns 70.5. I believe she must also receive 2 distributions in that year, one for when she turned 70 & the regular one for her being 71, correct? Am thinking it might be good to get both distributions when she starts retirement, in case there is a lag in getting her pension/annuity payments. Any suggestions on this?</p>

<p>Any suggestions on generally when the best timing to receive these required minimum distributions?</p>


<p>From a tax standpoint, the biggest question that I would have involves her AGI. If she waits to take both distributions (first before 4/1 the year following the year she turns 70-1/2 and the second one before 12/31 of that year), she may have a higher AGI than if she takes it during the year that she actually turns 70 1/2. However since she is retiring, the waiting may be fine, since her income will be less the year after retirement. Before she retires she is still eligible to contribute additional funds to her 401(k), so she may want to ramp that up while eligible now, reducing her AGI this year, so the RMD would not take as large a bite.</p>

<p>Thanks–her current income is significantly higher (>30%) than her retirement income is projected to be. Thanks for those thoughts and observations.</p>


401(k) administrator here – this is incorrect. She must take her first distribution no later than the April 1st following the date after she turns 70.5.</p>


  1. DOB 5/1/41, turns 70.5 on 11/1/11. Can take RMD in 2011, but must take it by RMD deadline 4/1/12. If she takes the first RMD in 2012, she will have to take the second one by 12/31/12.
  2. DOB 9/1/41, turns 70.5 on 3/1/12. First RMD deadline 4/1/12.
  3. DOB 11/1/41, turns 70.5 on 5/1/12. First RMD deadline 4/1/13.</p>

<p>Subsequent RMDs must be taken by 12/31 of each year. Agree that she should check with her tax advisor/accountant on the best time to take the first RMD. Just in case she decides to continue working after age 70.5, she can still made deferrals, and if she is not an owner of the company, she does not have to take the RMD until she actually retires.</p>

<p>Many people prefer to take the first RMD in one calendar year and the next RMD in the following calendar year, to avoid getting bumped up into a higher bracket due to two distributions in one year.</p>

<p>Agree that the best advice here is to consult her tax advisor.</p>



<p>Could you explain this a little more? I will be working at 70.5 and will continue until a few days after I hit 72. So I don’t have to take anything out while I’m working, but when I finally retire on December 31, 2014, when do I have to take the first distribution?</p>