Do You Have a Required Minimum Distribution in 2011?

Wednesday, March 02, 2011

By Beverly DeVeny, IRA Technical Expert
Follow Me on Twitter: @BevIRAEdSlott

Do you have a Required Minimum Distribution in 2011? These questions come up at the beginning of each year. When do I have to take my first distribution? What age do I use? Do I have to wait until I actually turn 70 ½?

Your first required distribution must be taken in the year you turn 70 ½. If you turn 70 ½ any time in 2011, you will have a required distribution (RMD) for 2011. It will be based on your 2010 year-end balance and the age you are on the last day of 2011. So, some individuals will use age 70 for their first distribution and some will use age 71. That’s okay.

If you have an RMD for 2011, you can take it at any time during the year, even if you are not yet 70 ½. In fact, if you take a distribution at the beginning of the year it counts as your RMD. RMDs cannot be rolled over to another retirement account and they cannot be converted to Roth IRAs. If you have an RMD for the year, you must take it before you do any Roth conversions.

If this is the year you turn 70 ½, you can actually defer your first distribution until April 1, 2012. But if you do that, then you have to take two distributions in 2012, your 2011 distribution and your distribution for 2012.

Did you turn 70 ½ last year and miss your distribution or delay it until this year? You must take that distribution by April 1, 2011 – not April 15 or April 18. And you then must take your 2011 distribution by the end of this year.
 

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