Which retirement plan requires a minimum distribution at age 70½?

The requirement for a minimum distribution at age 70½ applies specifically to traditional IRAs. This rule is in place to ensure that individuals begin to withdraw funds from their retirement accounts and start paying taxes on those distributions, as contributions to traditional IRAs are often made with pre-tax dollars. The stipulation encourages the use of retirement savings while ensuring that the government receives tax revenue from those funds.

In contrast, retirement annuities and fixed annuities do not universally have a mandated withdrawal age but instead operate based on the terms of the contract and the choices of the annuitant. Roth IRAs are also distinct in this regard; they do not require minimum distributions during the account owner's lifetime, allowing for greater flexibility in retirement planning. Hence, the minimum distribution requirement at age 70½ is a defining feature of traditional IRAs, affirming their specific regulatory framework and tax implications.