Traditional IRA

Can I Avoid Taking my RMD after Turning Age 70.5?

Most retirement plans have RMDs, or Required Minimum Distributions that you must begin to take by age 70.5.  The reason for this is that your investments have been growing tax-deferred, and the government is now ready to collect their share. If you do not need the money, it is generally beneficial to allow the money to continue growing tax-deferred.  Read below to see if you can delay your RMDs past 70.5. 

Did you turn age 70.5 last year?

If you passed age 70.5 in the last year, you must take an RMD by April 1st of the current year.  If you do not, you will have to pay a 50% penalty of the RMD amount in addition to the tax.

Are you still working past age 70.5?

If you plan to continue to work past age 70.5 and are not a greater than 5% owner in the business at which you work, you will be able to delay any RMDs from that 401(k) until retirement.  You will have to take RMDs from any other 401(k)s or Traditional IRAs that you have, unless you choose to roll those over into your current 401(k).  This can be a useful strategy if you have multiple retirement accounts but do not need any of the money currently. 

RMDs are calculated to make your retirement accounts be distributed over the rest of your life expectancy, but they can cause issues if you live longer than expected.  Check out this flowchart to learn more.

RMDs are important to keep track of, as the penalty for not taking them is 50% of the RMD amount.  It is easy to lose track of these if there are multiple accounts.  If you have questions regarding delaying RMDs or other general retirement planning advice, please give us a call at 303-440-2906 or click here to schedule a time to speak with us.

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail


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