When must I start withdrawing funds from my IRA's?

Question

I understand when you reach a certain age you must start using your IRA's.

How old do you have to be and how much do you have to take out each month or each year?

Thanks guys.

So, if I'm between age 60 and 70, I can take my money out of my traditional IRA and pay taxes as if it were income. Is that true? If so, why do I have to pay taxes on the same money twice? I paid taxes on the money (income) when I was working; I bought IRA's; now I have to pay taxes on this same money again? How can that be fair?

When someone tells me I'm not paying taxes on the same money twice times does not understand that if your employer has a retirement plan and you make so much money, you will not be able to take a deduction on the IRA money come tax day. Then, when I now withdraw the IRA that I was not able to claim as a tax deduction, I must pay taxes on it again. Tell me that's not true! My point is this: If I make too much money, I cannot claim a tax deduction on a traditional IRA and I'm forced to pay taxes on it twice (when I make if and when I cash the IRA in).

Answer 1

I believe it is 70-1/2.

Answer 2

Technically, you are allowed to withdraw your funds from your IRA at anytime.

Then there's the IRS rule that say if you make early withdrawals before age 59 1/2, there will be a 10% penalty. There are exceptions to that rule such as using up to $10,000 to pay your first home. There are several others which you can find here: http://obe231.blogspot.com/2006/12/individual-retirement-account.html In all IRAs, the minimum age to avoid the 10% early withdrawal penatly is age 59 1/2. Also, IRAs grow tax-deferred.

If you have a traditional IRA, there is a minimum distribution requirement at age 70 1/2. So, between age 59 1/2 to age 70 1/2, there is no limit on much you can take out. Only taxes you will pay on withdrawals are the portion of your contributions that you made tax deductible in the previous years and any gains in your account. When you become 70 1/2 years old, you must take the minimum distribution or there will be a 50% tax. You can always take more than the minimum distribution.

In Roth IRAs, you can keep the funds in there for life. There is no limit on how much you can withdraw from your IRA. Any withdrawals you make after age 59 1/2 are tax-free. That's because none of your contributions are tax-deductible.

Only limit that applies on all IRAs is how much you can put in, which changes almost every year.

Answer 3

first you must be at least 59 1/2 before you can withdraw without any tax penalties. next the amount of a withdrawal is generally based on a chart in a publication on the IRS web site . There are a couple of charts depending on your circumstance.
Next you wanted to know why you were being taxed on this withdrawal like it was income. You thought you had been taxed before. That is what is not true. Unless the money went into a Roth IRA it was not taxed. Suppose you open a regular IRA and deposit $1000 into it. Then you deduct the $1000 from your income on your tax return. This is where that income is NOT taxed. So that money and anything it earns in the IRA is taxed when You withdraw it.
Now a Roth IRA is different. A Roth Ira deposit is taken from money on which the tax has been paid. You can not take a deduction on your income tax return for any deposits made to the Roth IRA account. So the deposit is made with an after tax dollar and everything that grows in your Roth IRA is also tax free when you withdraw it. But you must not touch it for at least 5 years.
and if you are too young or not withdrawing for one of the permitted reasons, you might pay a penalty.

Answer 4

It is 70 1/2. The company or bank that holds your IRA account will notify you that you need to take your minimum distribution. The percentage that the IRS makes you take out increases every year. There is no way to avoid that. After 59 1/2 you can take money out of your IRA without the extra 10% penalty imposed. When you take money out after 59 1/2 there are no penalties, just taxes on the money taken out. This type of account is called a Qualified account, meaning that this money is pre-tax dollars, and all of the money and earnings are taxable.

Answer 5

Roth IRAs = never

Traditional IRAs = age 70.5

(the withdrawals need to be made by April 1st of the year following the year in which you turn 70.5). The amount is based on a life expectancy table (the first year's minimum distribution will be about 3.6% of the IRA's value & the RMD % will slowly grow as you age).

Your non-deductible contributions to your IRAs are NOT taxable. Hopefully you kept good records of your IRA contributions through the years. This is known as your tax basis and is NOT taxable (only the growth will be taxable).

Answer 6

In the year you become 70 1/2 years old. Depending on how much you have in the IRA, the management company for the IRA will tell you what are the minimum required withdrawals.

Answer 7

At age 70 and a half you must begin taking "minimum distributions" or start paying a penalty. How much you must take out depends on your actual age and the amount you have saved.

There's a table to calculate this just here: