Factoring in required minimum distributions (RMDs) is an important part of your retirement distribution strategy.

Generally, at age 70½, you'll begin taking an RMD annually from traditional IRAs or employer retirement plan accounts. You aren't required to take RMDs from Roth IRAs during your lifetime, but, after your death, your beneficiary will have to take them.

Here are basic guidelines about RMDs:

• You must begin taking RMDs from your IRA no later than April 1 following the calendar year in which you turn 70½. In subsequent years, the distribution deadline is Dec. 31.
• Your RMD is calculated annually by dividing the adjusted balance of all of your IRAs on Dec. 31 of the previous year by the applicable divisor from the IRS Uniform Lifetime Table.
• If you don't take your full RMD, you'll owe a 50% federal income tax penalty on any amounts you should have taken. Plus, you'll have to withdraw the total RMD amount and pay applicable income taxes.
• You have to calculate RMDs separately for each of your traditional IRA and employer plan accounts. But you don't always have to withdraw the RMD from each account. For example, if you have multiple IRAs or 403(b) plans, you can choose to take all of your IRA RMDs from one IRA or all of your 403(b) RMDs from one 403(b) plan account. But 401(k) and other employer plan RMDs have to be taken separately from each account.
• You can take out more than the RMD. Keep in mind, however, that distributions from a traditional IRA are added to taxable income in the year distributed.
• You aren't required to take RMDs from Roth IRAs during your lifetime, but, after your death, your beneficiary will have to take them.

This information is not intended as tax advice. Investors should consult a tax advisor.