The Wall Street Journal’s “Ask Encore” by Kelly Greene gives the answer.

As you know, at age 70 1/2 you must take your required minimum distribution (RMD) by April 1rst of the following year and then every year no later than December 31st. As Greene notes, some retirees will take their first distribution during the year they turn 701/2 to avoid taking two distributions following the year they become 70 1/2.

Many workers, age 70 1/2 and older continue working so they keep adding to their 401(k) plan. As long as the worker keeps working and contributing, there is nothing requring a distribution until April 1st the following year of their retirement.

Here is the rub if you own 5% or more of the company: you must begin distributions at age 70 1/2 even though you continue working.

If you have other retirement plans, you must begin taking distributions from them at age 70 1/2. If not, you face up to a 50% penalty on the value of the amount you should have withdrawn from those accounts.

IRS Publication 590 will answer many questions.

BankRate.com gives you further details about your retirement distributions.

If you need help calculating your required minimum distribution, send me a request by completing this contact page.

Here’s the formula if you want to complete the calculation yourself. Check your retirement account balances as of December 31st of the year prior to the year of your distribution. You’ll need the IRS Uniform Lifetime Table to get the age-based factor for your calculation. The age on your most recent birthday (starting at age 70 1/2) will tell you the age-based factor you will use.