RMD 2013: Get It Done Within 6 Days, or You'll Pay Bighttp://www.fool.com/how-to-invest/personal-finance/taxes/2013/12/26/rmd-2013-get-it-done-within-6-days-or-youll-pay-bi.aspx Dan Caplinger
December 26, 2013
The biggest benefit of retirement accounts like IRAs and 401(k)s is not having to pay tax on your earnings until you withdraw money from your account. But most people who were 70 or older before June 30 of this year have to start taking money out of their IRAs. Not taking your required minimum distribution, or RMD, in 2013 could cost you plenty.
Why you might have to take an RMD in 2013
RMD rules are a bit complicated, as they apply to those who are age 70 and a half or older by the end of the year. Most people are required to take their RMDs by Dec. 31 each year, but if you've just turned 70 and a half in the past year, you get a one-time break to wait until April 1 of 2014.
There's another group of people who have to take RMDs: those who have inherited an IRA. Usually, you have to take a required minimum distribution from an inherited IRA, regardless of your age.
How much you have to take out
Life expectancy is based on age and changes from year to year, but the percentage of your total balance that you have to withdraw goes up every year. As this IRS table (link opens PDF) shows, those who just turned 70 have to take about $3.65 for every $100 they had in their retirement accounts at the end of 2012, while those who are 80 years old have to take about $5.35 for every $100.
What if you don't take your RMD in 2013?