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What You Need to Know About RMDs Now

| September 27, 2017
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Your 70s represent a time to enjoy the fruits of your labor, but don’t get too comfortable because the IRS has some work for you to do six months after your 70th birthday. Required minimum distributions (RMDs) are one of the more complex and time-consuming aspects of managing your income in retirement. Let's start with the basics of RMDs:

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 70½. (You are not required to take RMDs from Roth IRAs during your lifetime.)

When do you have to begin withdrawing money?
IRS regulations require you to begin withdrawing a minimum amount of money from your retirement account(s) each year by April 1st of the calendar year following the year you turn age 70 ½. After that, RMDs must be taken each subsequent calendar year by December 31st.

Why is this information important to you?
Calculating the correct RMD amount(s) across one or multiple retirement accounts is complicated and can leave you vulnerable to hefty tax penalties if you miscalculate or fail to take RMDs from one or more qualified plans.

If you are interested in learning more now about strategies to minimize the burden of managing RMDs, give us a call to schedule a convenient time to talk.

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