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Q IRA vs Deferred Compensation payouts
  Aug 5, 2008

At what point am I required to start drawing on my IRA & deferred compensation accounts? If I understand correctly, I have to have "a plan" in place for IRA by age 70, but don't necessarily have to start actually withdrawing by then. Is there an age cutoff by which I'm required to start withdrawing funds from an IRA? Am I required to start withdrawing funds from a deferred compensation plan by any specific age? (Yes, the market's currently very iffy & the 3.5% I could earn in a savings account is better than the 1% I've lost over the past 12 months, but I'm in relatively stable mutual funds & trying to think long term. I'm currently 60.)


A Response from Mr. Bowden

Hello and thank you for submitting your question. For the first part of your question, I am assuming that you have a "traditional" or "roll over" IRA. Current IRA tax code states that you must begin distributions at age 70 1/2. This is known as RMD's or Required Minimum Distributions. As for the second part of your question....a deferred compensation plan is a plan designed by your employer. The "Plan Document" will outline the requirements if any. I'd suggest you request a copy of the Plan Document from your Human Resource department at work.

I hope that I have answered your question fully. It is a pleasure to be of service. Thank You! Bill

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