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[Video] You’re 70 1/2… Now What?

by Michelle Smalenberger / September 26, 2017


Now that you’ve been saving in your retirement account for years, there comes a time where you have to start taking money out.  That’s known as a Required Minimum Distribution (RMD).

What is this?  It is a mandatory withdrawal from certain accounts.

What accounts are impacted?  Your Traditional IRA, 401(k), 403(b), etc.

Why is this required?  The IRS provides incentive to save for retirement by deferring the income tax on money you put in these accounts, but they also want to collect tax revenue at some point.

When does it start?  You have to start these withdrawals in the year you turn 70 ½.  You have until April 1st of the year following the year in which you turn 70 ½.  If you wait until the April 1st of the following year then you would have to take two distributions in that specific year.   The first is for the year you turned 70 ½ and the second is for the year you turned 71.  Both of those have to be taken by December 31st.  Thereafter, you have to complete one Required Minimum Distribution amount each year.

When does it make sense to start?  Do you take one in the year you turn 70 ½ or two in the year you turn 71?

Factors that would affect your answer are:

  • What other sources of revenue do you have?
  • Are you still working?
  • Do you have pensions?
  • Are you collecting social security?


There are a lot of things to consider when taking your Required Minimum Distribution.  If you don’t take your RMD before December 31st each year, the IRS will penalize you 50% of the amount not taken.  It’s important to remember these deadlines.

If you are getting close to your 70 ½ birthday, please reach out to us so we can help you take care of your RMD.  We are happy to help walk you through this!

Michelle Smalenberger

Michelle Smalenberger

I have a passion for helping others develop a path to financial success! Through different lenses on your financial picture, I want to help create solutions with you that are thoughtful of today and the future. I have seen in my life the power of having a financial plan while making slight changes of direction from time to time. I believe you can experience freedom from anxiety and even excitement when you know your finances are on track.