RMD Basics

If you own or are the beneficiary of an IRA, 401(K) or other retirement plan, review this to avoid an RMD ( required minimum distribution) error.  Failure to take at least the RMD  amount each year results in a 50%  penalty by the IRS ! 

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• IRA owners:  your first RMD  must be taken no later than April 1st of the the year following the year you turn 70 1/2 .
• You reach age 70 1/2 on the date that is 6 calendar months after the date of your 70th birthday. 
• IRA owners after your very first RMD, all subsequent RMDs must be taken no later than December 31st of each year.
• RMDs are generally calculated by dividing the adjusted market value of your IRA as of December31st of the preceding year by the distribution period that corresponds with your age in the Uniform Lifetime Table (IRS Publication 590).
• You must calculate the RMD amount for each IRA separately,  However, if you have more than one IRA (must be the same type), you don't have to take a separate RMD  for each-you can aggregate and withdraw the entire amount from just one or withdraw a portion from each IRA to satisfy your RMD. 
• You can always withdraw more than the minimum distribution amount....just be prepared to pay the taxes.
• Failure to take a timely RMD results in 50% penalty on the undistributed amount - this rule apples to both IRA owners and IRA beneficiaries. 

Photo :  https://www.flickr.com/photos/stevendepolo/5437288053  Source: www.irs.gov
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