For 2010, the Required Minimum Distributions for seniors aged 70 1/2 + will resume.  Back in 2008, the President signed into law the Worker, Retiree, and Employer Recovery Act of 2008 which allowed Americans to defer their RMD’s for the year 2009.  Now it’s mandatory to start taking out your RMD to satisfy this year’s requirement.

The deadline is usually set for April 1st of the following year for anyone just turning 70 1/2 to take your first withdrawal.   After that, they have until the end of that same year to satisfy that year’s RMD .  So for example, should you turn 70 1 /2 by Sept. of 2010, you have until April 1st of 2011 to take your required minimum distribution.  That is if you have not already taken out a distribution by Dec. 31st 2010.

Let’s say your birthday is March 1st.  In the above example, if you waited Jan. 15th, 2011 to take your 1st distribution, then that RMD would be factored on your attained age of 70.  You then would need to take out another RMD by Dec. 31 2011 and that distribution will be based on your age of 71.

Any missed required minimum distributions may be subject to a 50% imposed tax by the IRS.

For more info on IRS – Individual Retirement Arrangements (p590) download <—click here

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