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RMD (Required Minimum Distribution)
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The IRS has proven Ben Franklin right: paying taxes is inevitable - certainly when it comes to your retirement assets. You can defer paying some income taxes by refraining from distributing your retirement assets, but you can't do this indefinitely. The IRS requires you to begin receiving required minimum distributions (RMD) in the year you reach age 70.5, and an understanding of these requirements will help you avoid IRS penalties.
 

Affected Retirement Accounts
For retirement account owners, the RMD rules apply to Traditional, SEP and SIMPLE IRAs, qualified plans and 403(b) accounts. For the purposes of this article, the term Traditional IRA will include also SEP and SIMPLE IRAs. The RMD rules do not apply to Roth IRA owners, but they do apply to Roth IRA beneficiaries.

When You Must Begin
You must start receiving distributions from your retirement account by the required beginning date (RBD). Generally, your RBD is Apr 1 of the year following the year you reach age 70.5. If you are still employed at age 70.5 and you participate in a qualified plan or 403(b) account, you may be allowed to defer the start of your RMDs until after you retire. This exception, however, does not apply if you own at least 5% of the business that adopted the plan. Your plan administrator should be able to tell you if the plan allows this deferment. Age 70.5 Determination
Determining when you reach age 70.5 is as important as it is easy. The RMD regulations explain that you reach age 70.5 six months after the 70th anniversary of your birth. For example, if your date of birth is Jun 30, 1933, the 70th anniversary of your birth date is Jun 30, 2003, and you reach age 70.5 on Dec 30, 2003. Since you reach age 70.5 during 2003, your first RMD must be distributed by Apr 1, 2004. If you reach age 70 between Jun 30, 2003, and Dec 31, 2003, then you become 70.5 during 2004, and your RBD is Apr 1, 2005.