BOSTON (CBS) – It is your money in that IRA. And you can get at it. But you may have to pay a penalty to get at it.

The IRS and Congress allowed tax deferred growth and most times a deduction for your IRA, so they will not be happy if you want to withdraw your money before age 59½.

They will add a 10% penalty plus taxes. If you wait until age 59½ you can get the money without the penalty but you will still owe the taxes.

But if you don’t need the money at 59½ you can leave it in the IRA hopefully still growing until you are 70½.

Minimum required distributions known as MRDs normally must begin at age 70½ for all of your IRAs except the Roth.You must generally start receiving distributions from your IRA by April 1 of the year following the year in which you reach age 70½.

The distributions are based on your life expectancy using an IRS table, the Uniform Lifetime Table, found in the IRS publication 590.

Don’t mess with the minimum required distribution. If you are late in taking that first distribution there is a 50% penalty on the amount of the required minimum distribution.

If you have multiple IRAs, you must use the combined value to determine the minimum distribution. You need use only one account to withdraw funds from though.

But to make life easier, especially the bookkeeping part, consider consolidating your IRAs and your retirement plans into one account. Getting one monthly statement instead of four or five will definitely make life simpler.

The custodian of your IRAs will help you make your withdrawals in a timely manner. When filling out the application you did put in your birthday so they will know when you turn 70.

On Saturday May 17th Dee will be the keynote speaker at The Money Conference which is a FREE one-day event presented by The Office of Massachusetts State Treasury and the Massachusetts Financial Literacy Trust Fund, in conjunction with local cities and community partners to help households build their financial knowledge and improve their financial behavior through quality financial education.

The Money Conference: Financial Empowerment for Individuals & Families

Saturday May 17, 2014
8:30 am – 3:00 pm

Everett High School
100 Elm Street
Everett, MA 02149

Questions? Contact Sheila O’Loughlin at (617) 367-6900.

Do you feel your need for financial education and empowerment is urgent? You are not alone! Americans are saving less, spending more and carrying credit card debt over from month-to-month, suggesting that the painful financial lessons of the recent past may quickly be forgotten.


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