Am I required to take money out of my IRA?

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The answer depends on the type of IRA:

  • You must begin taking Minimum Required Distributions ("MRD") from Traditional and Rollover IRAs each year once you reach age 70 1/2. The amount is a percentage based on your age, according to IRS rules.
  • There is no MRD for Roth IRAs, so you're never required to take money out of them
  • special rules apply to beneficiaries of IRAs - see IRS Publication 590 for details

If you do not take the full amount of your MRD, the penalty is harsh: 50% of the amount that you should have withdrawn, but didn't.

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