A financial website is offering a reminder to seniors who turned 70-and-a-half years old last year who own a traditional IRA. April 1 is the deadline for them to make their first minimum withdrawal from the account, SmartMoney.com reports.
The website, which is part of the Wall Street Journal’s digital network, stated seniors who have not started dipping into their traditional IRA are required to take their first minimum withdrawal no later than April 1.
Seniors who do not make their first minimum withdrawal will be penalized by the Internal Revenue Service equal to 50 percent of the shortfall.
According to tax law, seniors who turned 70-and-a-half years old last year have to take the mandatory payouts from the traditional IRAs.
Those who have Roth IRAs do not have to worry about withdrawing their money.
Seniors who already took their IRA withdrawals earlier this year or last year do not have to worry about the April 1 deadline.
To calculate the minimum withdrawal amount, seniors are urged to use a joint life-expectancy figure which is based on their age and someone 10 years their junior, states SmartMoney.com.
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