Dec. 31 is an important deadline in many ways for many people, retirees included.
When you reach age 70 1/2, your required minimum distribution,* or “RMD,” must be taken out no later than Dec. 31.
You may delay taking your first RMD until April 1 of the year after you turn 70 1/2. If you delay your first RMD, you will have to take two that year, the first by April 1 and the second by Dec. 31.
Failure to take an RMD can be costly, as the IRS can assess a penalty of 50% of the amount not taken.
*RMD Definition: The amount that Traditional, SEP, and SIMPLE IRA owners and qualified plan participants must begin withdrawing near age 70 1/2. RMD amounts must then be recalculated and distributed each subsequent year.