By what date must Traditional IRA distributions start for participants who are 70 1/2 years old?

For individuals who have a Traditional IRA, the requirement is that distributions must start by April 1st of the year following the year they turn 70 1/2 years old. This regulation ensures that individuals begin taking minimum distributions from their retirement accounts, as the IRS requires these accounts to eventually be depleted rather than allowing them to grow indefinitely without taxation.

Beginning the year they reach the age of 70 1/2, individuals can expect to manage their retirement savings by taking the required minimum distributions (RMDs). The consequence of not taking these distributions can be severe, potentially leading to penalties equal to 50% of the amount that should have been withdrawn.

The choice of April 1st is particularly relevant because it aligns with the IRS policy designed to incentivize individuals to use their retirement savings during their retirement years, ensuring that tax liabilities are realized over the individual's lifetime rather than deferring them indefinitely.