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Mandatory Withdrawals

You must begin taking distributions from an IRA (including a SIMPLE IRA, but not a Roth IRA) no later than April 1st of the year following the year in which you reach age 70-1/2. For any year after you reach age 70-1/2, you must take the minimum distribution by December 31st of that year. There's an exception to this rule for Roth IRAs, which carry no mandatory distribution requirements.

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IRS rules allow for penalty-free withdrawals from retirement accounts. You may begin receiving money from your retirement accounts before you reach age 59-1/2, without the normal 10 percent penalty. Use this 72T calculator to determine your allowable 72T Distribution and how it can help fund your early retirement.

The IRS limits how much can be withdrawn by assuming any future earnings will be at most 120% of the Federal Mid-Term rate. This conservative approach can help assure that you will not prematurely deplete your retirement account. However, if you have a higher rate of return your account can actually grow, even with your distributions. On the other hand, if you suffer losses your account your balance may end up shrinking faster than you might expect. This 72T calculator is designed to examine the affects of 72T distributions on your retirement plan balance.

The amount of your mandatory distributions must be calculated under a formula prescribed by the IRS. If you take less than the required distribution, the penalty for taking too small a distribution is a 50 percent excise tax on the amount not withdrawn as required. You can always take more than the required amount (assuming you're over age 59-1/2) but the extra withdrawals don't count toward your minimums for future years.

Uniform Distribution Period Table for
Determining Required Lifetime Minimum Distributions
Age of Individual Number of Payout/Distribution Years
70 27.4
71 26.5
72 25.6
73 24.7
74 23.8
75 22.9
76 22.0
77 21.2
78 20.3
79 19.5
80 18.7
81 17.9
82 17.1
83 16.3
84 15.5
85 14.8
86 14.1
87 13.4
88 12.7
89 12.0
90 11.4
91 10.8
92 10.2
93 9.6
94 9.1
95 8.6
96 8.1
97 7.6
98 7.1
99 6.7
100 6.3
101 5.9
102 5.5
103 5.2
104 4.9
105 4.5
106 4.2
107 3.9
108 3.7
109 3.4
110 3.1
111 2.9
112 2.6
113 2.4
114 2.1
115 and older 1.9

One simple and uniform table allows most participants to determine the required minimum distributions. The table should be used only by the owner of an IRA who is unmarried, married to a spouse not more than 10 years younger, or whose spouse is not the sole beneficiary. Thus, the IRA owner determines the required annual distribution by:

  • locating his or her current age on the table to obtain the distribution period, and
  • dividing that number into the account balance as of the end of the previous year.

By using the uniform distribution period table, most participants will be able to determine their required minimum distribution for each year based on just their current age and the account balance as of the end of the prior year.



Computing minimum IRA distributions using the old rules can be a rather daunting task, especially if you've established numerous IRAs over the years. Many financial institutions are willing to help you compute the minimums if you consolidate your accounts with them. Otherwise, you should consider hiring a financial planner or accountant to help you set up a withdrawal schedule, since the 50 percent penalty for making a mistake in this area is quite severe.

Special rules, too numerous to relate here, apply if your beneficiary is not your spouse and is more than 10 years younger than you, if you change beneficiaries, if your beneficiary dies or if you receive an inherited IRA account. For more detailed information, see IRS Publication 590, Individual Retirement Arrangements (IRAs).

IRA trustees are required to provide account holders with a statement of their year-end account balances by January 31. In addition, the trustee is also required to state the amount of the required distribution and the date by which such amounts must be distributed. This is great news for IRA holders because it will relieve them of the burden of making mandatory distribution calculations and staying in compliance.

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