Chartered Retirement Planning Counselor (CRPC) Practice Exam 2025 - Free CRPC Practice Questions and Study Guide

Distributions from IRAs and SEPs must begin by April 1 of the year following the year in which an individual turns 70½. This requirement is part of the Internal Revenue Service (IRS) rules related to Required Minimum Distributions (RMDs). The rationale behind this rule is to ensure that individuals start to withdraw funds from their tax-advantaged retirement accounts, which have been growing tax-deferred, thereby eventually paying income tax on those distributions.

If an individual reaches the age of 70½ in a given year, they must take their first distribution by April 1 of the subsequent year. This allows for the deferral of the first distribution for up to 1.5 years, a provision that can be beneficial for financial planning but also must be followed to avoid penalties associated with not taking the required minimum amount.

The other options do not accurately represent the IRS regulations surrounding the timing of required distributions, as they either prescribe earlier or later deadlines that do not align with the established rules. Therefore, knowing the correct deadline is essential for compliance and effective retirement planning.