If you have an IRA or inherited an IRA, did you take your required minimum distribution (RMD) for 2017? Time is ticking away and you must take it by December 31st to avoid a 50% penalty!
If you are an IRA owner who turned 70½ this year, you only have until April 1, 2018 to take your very first RMD. However, if you choose to delay your first RMD until 2018, you still must take your regular 2018 RMD so you will need to take two RMDs in 2018.
After your first RMD, all subsequent RMDs must be taken no later than December 31st each year. Failure to take a timely RMD results in a 50% penalty on the undistributed amount.
RMDs are calculated using the adjusted market value of your IRA as of December 31st of the preceding year. You can always withdraw more than the minimum.
For Multiple IRAs:
You must calculate the RMD amount for each IRA separately but if you have more than one IRA of the same type, you can aggregate and withdraw the entire amount from just one IRA or a portion from each IRA to satisfy your RMD.
For Inherited IRAs:
If you inherited an IRA (this includes Roth IRAs) you are required to begin taking RMDs each year by December 31st starting the year after the IRA owner dies. The 50% penalty that applies to IRA owners also applies to IRA beneficiaries.
If you need more information, your local retirement distribution expert or tax professional can assist!