You're over age 71 1/2, with no designated beneficiary
If you didn't designate a beneficiary for your IRA, the IRS will treat you as if you did when it comes time to take your 2012 IRA minimum withdrawal.
Say, for example, you'll be 73 as of Dec. 31, 2012. At the end of last year (2011), your IRA balance was $250,000. When figuring out how much you need to withdraw, your 2012 minimum withdrawal equals $250,000 divided by the joint life-expectancy figure of 24.7 for someone 73 years old (from the calculator below). That's because your minimum withdrawal calculations assume you've named an IRA beneficiary who is 10 years your junior — even though you haven't actually named anyone. So your magic number is $10,121 ($250,000/24.7). You must withdraw that amount (at least) by Dec. 31, 2012.
Next year (2013) you must take another minimum withdrawal by Dec. 31, 2013. That amount will equal your Dec. 31, 2012, IRA balance divided by the joint life-expectancy figure based on your age at the end of next year.
So does this mean you shouldn't bother designating a beneficiary? Absolutely not. Naming a beneficiary is the only way to be sure your IRA money goes to the intended person after you're gone. When there's no designated beneficiary, your will controls who gets your IRA. But wills can be unclear, and they're often contested. When there's no will, the laws of your state decide who gets your IRA. So get the necessary form from your IRA trustee and designate your beneficiary.
|What's Your Joint Life Expectancy?|
Use this to find your joint life-expectancy divisor by entering your age as of the end of the calendar year for which the minimum withdrawal must be taken. For example, if you'll be 73 at the end of 2012, enter that age. The appropriate divisor is 24.7. Divide your Dec. 31, 2011, IRA balance by 24.7. The result is your 2012 minimum withdrawal amount. Take out that amount (at least) by Dec. 31, 2011, to avoid the 50% penalty.
You may not want to use this feature if your spouse is designated as the sole beneficiary of your IRA and he or she is more than 10 years younger. Click here to see why. Alternatively, you can choose to keep things simple and use this calculator to find your divisor under the "general rules," which will result in a somewhat higher withdrawal, and somewhat higher taxes.