why are required minimum distribution set at age 70.5 and not at age 70 or 71?

723 views
0

why are required minimum distribution set at age 70.5 and not at age 70 or 71?

In: Economics

It’s usually the start of the year following turning 70.5. So if my birthday is in July, my 70.5 date is in January so the date of distributions would be the end of that year. If my birthday was in May, the 70.5 date would be November, so my distribution date would be the end of the year.

It’s a way to standardize when you are allowed distributions and allocate when you have to take on that tax burden.