NEW YORK (MainStreet) — April 1 was the deadline for those who turned 70 ½ in 2014 to take their first annual minimum required distribution (MRD) from their IRAs and 401(k)s; however, many retirees unknowingly overlooked it.

“Life can be very busy with caring for loved ones and enjoying hobbies that people simply forget,” said Maura Cassidy, director of retirement with Fidelity.

Some 59% of Fidelity’s investors eligible to take their first MRD from their IRA in 2014 had not yet taken the full amount required, and of those, 43% had not taken any MRD to date for the year, according to Fidelity data.

“If individuals miss the deadline, they can submit a request for an exception when they file their 1040 tax filing for 2014,” Cassidy told MainStreet. “This is accomplished by filing IRS form 5329.”

By failing to take a distribution however investors are vulnerable to significant tax penalties when their withdrawals are not made in a timely fashion.

“Investors spend so many years in a saving mindset that it’s often hard to even fathom it’s time to begin to withdraw from a retirement savings account like an IRA,” Cassidy said.

The MRD is designed to ensure individuals aren’t deferring paying taxes on retirement savings indefinitely.

“Deferring taxes is great while you’re living, but you simply can’t do it forever,” said Michael Brady president of Generosity Wealth Management in Boulder, Colo.  “A surviving spouse is allowed to roll your IRA into his or her IRA and continue the deferral, but upon their death the money will be left to a non-spouse, assuming they don’t remarry.”

Those who have IRAs and 401 (k) accounts held with more than one institution may need to pay extra attention to managing multiple retirement accounts.

“It’s important to note that withdrawals from IRAs and 401(k)s cannot be aggregated and therefore must be taken separately,” said Cassidy.

If not, mistakes can occur easily.

“When you get a check and letter that states you’ve satisfied the required minimum distribution for the year, you think you’re good but in reality you’ve only satisfied part of it,” Brady told MainStreet.

Avoiding penalties is as easy as writing a letter to the IRS. “Explain what happened and that you’ve made attempts to remedy,” Brady said. “Despite their reputation, I have found the IRS staff to be very understanding to reason with as long as you’re upfront with them and are honestly trying to adhere to an admittedly confusing set of rules.”

In other words, penalties can be waived but on a case by case basis and at the discretion of the IRS.

 —Written for MainStreet by Juliette Fairley