The government requires you to start taking minimum distributions from your IRA, 401(k) and other tax-deferred accounts at age 70 1/2. Why? Because these are retirement accounts, not estate plans, and the government wants to get its hands on some of the taxes that have been deferred for so many years.

In general, you must take your first withdrawal no later than April 1 of the year after the year you turn 70 ½. If you are still working at that age, you can delay distributions until April 1 of the year following the year in which you retire, unless you own more than 5 percent of the company.

If you don't make your first withdrawal until the year after the year you turn 70.5 (or retire), you will have to make your second withdrawal by December 1 of that same year.

The penalty for not making this distribution is 50 percent of the amount you should have withdrawn, in addition to regular income taxes.

The distribution is based on your life expectancy.

You can take more than your required distribution in a given year, but you cannot apply the excess against your required distribution for the next year.

This applies only to traditional IRAs. There is no distribution requirement for Roth IRAs, which is one of their attractions.

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