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Ask the Expert: Taking your IRA's first required minimum distribution

I'll turn 70 this October. I know I can wait until I'm 70½ to take my first required minimum distribution (or RMD). If I do, must I take one RMD or two in 2020? If I wait until April 2020 to take my first RMD, am I allowed to make a 2019 IRA contribution?

The deadline for taking your first RMD is April 1 of the year after you turn 70½. Because you'll turn 70½ in 2020, your first RMD deadline will be April 1, 2021. The correct RMD amount will be the Dec. 31, 2019, balance of all your IRAs divided by your life expectancy, listed in an actuarial table at the back of IRS Publication 590.

Why must you use the Dec. 31, 2019, balance to calculate your RMD? Because annual RMDs are always based on the previous year's Dec. 31 total IRA balance — and the April 1, 2021, deadline for taking your first RMD represents a onetime three-month extension of the real Dec. 31, 2020, deadline.

The deadline for taking the second RMD (based on your IRA balance at the end of 2020) will be Dec. 31, 2021. So if you wait as long as possible to take the first RMD, you'll have to take two RMDs in 2021. To avoid being taxed on two RMDs in the same year, take the first one in 2020.

No matter when you take the first RMD, 2019 is the last year for which you can make an IRA contribution. You can't contribute to an IRA for the year in which you turn 70½, or for any year thereafter.

The bottom line

It's smart to take your first RMD by Dec. 31 of the year in which you turn 70½.

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