Finance
January 26, 2020

That first RMD from your IRA. What you need to know

When you reach age 70½, the Internal Revenue Service instructs you to start making withdrawals from your traditional IRA(s). These withdrawals are also called Required Minimum Distributions (RMDs). You will make them, annually, from now on.

If you fail to take your annual RMD or take out less than the required amount, the I.R.S. will notice. You will not only owe income taxes on the amount not withdrawn; you will owe 50 percent more. (The 50 percent penalty can be waived if you can show the I.R.S. that the shortfall resulted from a “reasonable error” instead of negligence.)

Many IRA owners have questions about the rules related to their initial RMDs, so let’s answer a few.

 
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Will you avoid these estate planning mistakes?

Too many wealthy households commit these common blunders. 

Many people plan their estates diligently, with input from legal, tax, and financial professionals. Others plan earnestly but make mistakes that can potentially affect both the transfer and destiny of family wealth. Here are some common and not-so-common errors to avoid.

Retirement planning weak spots; they are all too common

Retirement savers will want to diversify their invested assets.