minimum ira withdrawal over age 70?

Question

i am over 70 and would like to know the minumum percentage of my IRA SAVINGS THAT I CAN WITHDRAW

Answer 1

Minimum IRA withdrawal only applies to Traditional IRA, not Roth IRA.

But if you would like to figure it out, first open this file : http://www.irs.gov/pub/irs-pdf/p590.pdf (its a pdf file, so you need Adobe Acrobat, which is free to download).

Here is the formula to figure out the minimum distribution requirement:
(Your account balance on Dec 31 of the previous year) DIVIDED BY (your life expectancy as stated in the appropriate Table, which is usually Table III).

Example: Lets say you become age 70 1/2 in 2006. Your ending account balance on Dec 31, 2005 was $86,000. The minimum distribution requirement is: ($86,000/27.4) = $3138.69. You may start making withdrawals when you become age 70 1/2. If you do not, you must take the minimum distribution by April 1, 2007. This date is called the "Required beginning date." Remember, this is only the mimimum. You can always take more out, but this will not affect the minimum requirement distribution.

Continuing with this example. In 2007, you are age 71. Your account balance on Dec 31, 2006 was: $83,000. The minimum distribution for 2007 is: ($83,000/26.5) = $3132.08. You must take this minimum amount by December 31, 2007 (not April 1, 2008). Failure to meet this minimum amount will result in a 50% tax on the amount you have not taken. Let's say in 2006 you only took $2000 from your Traditional IRA. Your minimum requirement is $3132.08. Since you did not meet the minimum requirement, the amount you will be taxed on is $1132.08 (3132.08 - 2000). You will owe: $566.04 in taxes.

Answer 2

Beginning April 1st in the year after you turned 70 1/2, you must start making minimum withdrawals from your IRA.

Here's a link to IRS Pub 590 that will tell you everything that you need to know. http://www.irs.gov/pub/irs-pdf/p590.pdf That pub is both comprehensive and seriously confusing. Here's a link to a table at BankRate.com that significantly simplifies the calculations. It's current up through December 2005 but shold be close enough to keep you out of trouble: http://www.bankrate.com/brm/itax/news/20010321b.asp

If you don't take out the minumum there are adverse tax consequences so make sure that you withdraw at least the minimum required based on your age on April 1st of each year.

Answer 3

The Minimum Required Distribution starts at age 70 1/2 and involves a mathematical formula that your IRA administrator can help you with. The IRS may also be able to help you with the calculation but you should contact the company who holds your IRA. Good luck.

Answer 4

you do not mutually personal the IRA. it isn't a possibility to mutually personal an IRA. both truly one of you owns the IRA, or it isn't an IRA. Take each and each and every of the place of work artwork to a CPA and/or a Tax lawyer NOW. you pick to make certain how a lot worry you're in with the IRS in the previous the IRS does. decide Julie: Employers don't have to any extent further some thing to do with IRAs.

Answer 5

Unfortunately the Schwab site mentions the RMD at age 70 1/2 but does not say how much it is, give them a call.

http://www.schwab.com/public/schwab/research_strategies/market_insight/retirement_strategies/in_retirement/generating_cash_flow_from_your_retirement_portfolio.html?cmsid=P-1007226&lvl1=research_strategies&lvl2=market_insight&refid=P-1050147&refpid=P-999830

Xtra note: I used to be a math wiz, but after reading through the tables for the calcs . . .
I have decided it would be wise to let the IRA plan adminstrater do it !