April 1 is the deadline for federal employees and annuitants with traditional IRA accounts to make their first minimum required distribution (MRD) for 2011.

The deadline applies to feds who turned 70-1/2 years old in 2011.

“Now it makes no difference if this person is retired or still working,” said Ed Zurndorfer, a registered employee benefits consultant, in an interview The Federal Drive with Tom Temin.

The MRD is calculated by a formula based on the account balance and the life expectancy. If you miss the deadline, the penalty is 50 percent of what you were supposed to take out, “so the penalty is pretty severe if you don’t take out that MRD,” Zurndorfer said.

One important point to note is that if you turn 70-1/2 in 2012, the deadline for the first MRD is actually Dec., 31, 2012, he said.

Also, if you have a Roth IRS, you do not have to take out a MRD, “no matter what their age is,” Zurndorfer said.

MRDs must be made separately for Thrift Savings Plan and 401(k) plans, he said.

One of the differences between TSP and the traditional IRS is that employees who still work for the federal government but are at least 70-1/2 do not have to take out a MRD, Zurndorfer said.

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