When must traditional individual retirement annuity (IRA) distributions begin?

The correct choice states that traditional individual retirement annuity (IRA) distributions must begin by April 1st of the year following the account owner reaching age 70.5. This requirement is guided by the rules established by the Internal Revenue Service (IRS) regarding required minimum distributions (RMDs) from retirement accounts.

Originally, the age for starting RMDs was 70.5, but adjustments were made to the law, which led to updates after 2020. However, the fundamental principle remains that individuals must start withdrawing a minimum amount from their traditional IRAs to avoid penalties and ensure that the funds are being utilized as intended during retirement.

This rule ensures that the funds in the IRA are eventually taxed, as contributions to traditional IRAs typically come from pre-tax income. By requiring distributions to start at a certain age, the IRS aims to promote the use of retirement savings instead of allowing the account to grow indefinitely without tax implications.

In summary, distributions must begin by April 1st of the year following the individual reaching age 70.5, ensuring compliance with RMD rules and proper use of retirement funds within specified timelines.