Age 59 1/2

• You can begin taking regular distributions from your IRA account once you reach the age of 59 1/2. If you wait until at least 59 1/2 to start taking money from your IRA you will not owe a penalty to the Internal Revenue Service. If the money you are withdrawing comes from a traditional IRA, you will owe ordinary income taxes on the money you take out. The money will be taxed at your normal tax rate. If you withdraw money from a Roth IRA you will not owe any federal taxes on the amount you withdraw.
  
  

Age 70 1/2

• If you have a traditional IRA, you must begin taking required minimum distributions once you reach the age of 70 1/2. The amount you are required to withdraw is based on the size of the account and your life expectancy. You can check with your accountant or tax preparer to help determine how much you are required to take out. If you have a Roth IRA, you are not required to take any required minimum distributions, and you can leave the money in the account as long as you like.
  
  

72t Provision

• If you are planning to retire before age 59 1/2, you can still access the money in your IRA without penalty by taking advantage of the 72t provision. This provision of the tax code allows those under 59 1/2 to make equal withdrawals from their plans each year, provided they stick with the withdrawal schedule for at least five years. The amount you can withdraw each year is based on the balance of the account and your life expectancy. That can limit the amount younger workers can receive, but the 72t provision can still be a good way for younger workers to get the cash flow they need early in retirement.
  
  

Run the Numbers

• Going from being an employee with a steady paycheck and regular withholding to a retiree living on the proceeds of an IRA is a huge transition. One thing new retirees can overlook is the impact this transition can have on their tax situation. When you work for someone else, that employer is responsible for withholding taxes and submitting them to the IRS. But when you retire and start drawing money out of your IRA, you are responsible for paying those taxes. It is a good idea to run the numbers, using a tax preparation software package and estimating how much you plan to withdraw. This can help you budget more effectively for the taxes you might owe at the end of the year.