# How Much Do You Have to Withdraw From an IRA at 70 1/2?

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The Internal Revenue Service requires withdrawals from a traditional IRA beginning on April 1 of the year following the year the owner turns 70 1/2. So, April 1 of the year in which the owner turns 71. The IRS calculates required minimum distributions (RMDs) based on life expectancy tables. To determine which one depends on marital status and age of spouse.

## Life Expectancy

The IRS has a Uniform Lifetime Table upon which it bases the number of years to use in determining the RMD amount. However, if the owner's spouse is more than 10 years younger, then the Joint Life Expectancy Table is applicable instead. For example, an IRA owner who is 80 years old with a spouse less than 10 years younger has a life expectancy of 18.7 years. This is the denominator, or divisor, used in the calculation.

## Calculating RMDs

The accumulation in the traditional IRA as of the previous year is the owner's numerator. So, if the owner's total is \$120,000 at age 70, this is the numerator for the year he turns 71. Life expectancy at age 71 is 27.4, so long as the spouse is less than 10 years younger. Therefore, calculating the RMD is \$120,000 divided by 27.4, which is \$4,379.56. The owner can take this as a lump sum or as a periodic distribution throughout the year.

## If Spouse Is More Than 10 Years Younger Than Owner

If the owner's spouse is more than 10 years younger, then the IRS requires that she use the Joint and Last Survivor Expectancy Table. The left-hand side lists the age of the owner and the top lists the age of the spouse. Finding the numeric value where they intersect gives the denominator used in the calculation. So, at the time the owner is 71, if the spouse is 52, the life expectancy is 33.3. Therefore, dividing \$120,000 by 33.3 equals an RMD of \$3,603.60.

## Penalties for Not Taking RMDs

Failing to take the RMD that the IRS requires could result in a 50 percent excise tax as a penalty. If the person believes that the occurrence of a reasonable error is the reason for the insufficient distribution during a given year, he may request that the IRS waive the tax using Form 5329. This is the same form on which to report a tax liability as well.