If part of your savings consists of qualified plans, 403(b)s, SEP IRAs, 457(b) plans and Traditional IRAs, you must begin to take required minimum distributions (RMDs) each year, beginning the year you reach age 70.5. Failure to take the distribution can result in a penalty of 50% of the deficiency.
It is not uncommon to forget or neglect to take an RMD, or to miscalculate the amount and not take out enough. The RMD amounts for each retirement account must be calculated separately. However, if you have multiple Traditional, SEP and SIMPLE IRAs, the total RMD for these accounts can be taken from one or more of the accounts. Roth IRA owners are exempt from this requirement. (To learn more, see Strategic Ways To Distribute Your RMD.)