RMD's can be tricky, so we’re helping you learn where to start when it comes to a key piece in the retirement puzzle.
Year-end is a critical time for retirees who are subject to required minimum distributions (RMDs) from their qualified retirement accounts. To avoid a hefty penalty of 50% of the amount that should have been withdrawn, your RMD must be taken annually by the end of the calendar year. (Note that this differs from the deadline for your first RMD, which must be taken before April 1 of the year after you turn 73.)
Let's start with the basics:
- What are required minimum distributions?
A required minimum distribution is the minimum amount you must withdraw from your tax-advantaged retirement account(s) each year, including IRAs (traditional, SEP, and SIMPLE), 401(k)s, and 403(b)s when you reach age 73. You aren’t required to take RMDs from Roth IRAs during your lifetime.
- Why is this information important to you?
Calculating the correct RMD amount(s) across one or multiple retirement accounts is complicated. If you miscalculate or fail to take RMDs from one or more qualified plans, you can be vulnerable to hefty tax penalties.
Remember: You have help available to calculate the correct annual RMD amount across your retirement accounts.
If you’re interested in learning more about strategies to minimize the burden of managing RMDs, contact the office today to schedule an appointment.
*Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 591/2 may be subject to an additional 10% IRS tax penalty.