Withdrawals from an IRA

January 25, 2017 -

By law, you are required to take minimum required distributions when you attain age 70 ½ from an IRA which you created or which your spouse created. 

In the event that you inherit an IRA from a third party, other than your spouse, then you will be required to take minimum distributions beginning the year after the IRA’s creator died.  The amount varies depending on the beneficiary’s age.  If you fail to take the required minimum distribution, then you will incur a 50% penalty and income which you fail to take will be included in your federal and state income for the year in question.  An exception to the rule is that if the creator died before attaining age 70 ½ then you will incur no penalty if you take all of the funds within five years after the creator’s death.