“When do I have to make mandatory withdrawals from my IRAs?”
The basic rule is simple. Mandatory withdrawals from traditional IRAs, SIMPLE IRAs, and SEP IRAs generally begin after age 70½. They occur every year. (You are never required to make annual withdrawals from a Roth IRA, provided you are its original owner.)
If you fail to take your annual RMD or take out less than what is required, the Internal Revenue Service will notice. You will be assessed a severe tax penalty equal to 50% of the RMD amount.
Your initial RMD must be taken by April 1 of the year after you turn 70½. If your 70th birthday occurs in the first half of a year, you turn 70½ within that calendar year. If your 70th birthday occurs in the second half of a year, you turn 70½ during the following calendar year.
So, if you turned 70 during the first six months of 2019, you will be 70½ by the end of 2019, and you must take your first RMD by April 1, 2020.
If you turned 70 in the second half of 2019, then you will be 70½ in 2020, and you don’t need to take that initial RMD until April 1, 2021.
After you make that first mandatory withdrawal from your traditional IRA, your annual RMD deadline moves. All your subsequent RMDs must be taken by December 31 of each year.
While you can wait until April 1 of the year after you turn 70½ to take your first RMD, there isn’t much merit in doing so. It opens the door to a bigger income tax bill in that successive year, as you will be taking two RMDs out of your traditional IRA, representing two big chunks of taxable income.
If one of the big investment firms hasn’t calculated your first RMD for you, then you can calculate it yourself with the aid of I.R.S. Publication 590-B. You use I.R.S. life expectancy tables and your IRA balance on December 31 of the previous year to do this. You don’t have to withdraw the whole RMD amount at once; it can also be withdrawn gradually, in increments.
Maybe you need to take RMDs from two or more IRAs. In that case, you have to calculate the RMD for each IRA separately, then add them up to arrive at the total RMD amount you must withdraw for the year. You can take the whole RMD amount from one IRA or multiple IRAs.