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  3. Do you know what RMDs are? - July 18, 2018

Do you know what RMDs are? - July 18, 2018

Submitted by Aspect Wealth Management on July 18th, 2018

What is a a required minimum distribution? July 18,2018

Tax-advantaged retirement accounts can help you build wealth and prepare for a comfortable retirement. However, you won't be able to accumulate cash in these special savings vehicles forever. Owners of certain types of accounts will have to eventually start withdrawing their money in the form of required minimum distributions, or RMDs.

70 ½: The Number to Know

The IRS deems you 70 ½ exactly six months after your 70th birthday. Once you reach this age, you have until April 1 of the following year to take a required minimum distribution from most IRAs and defined contribution plans like 401(k)s. Once you begin taking RMDs, you must continue taking them every year, though you have until the last day of each calendar year (Dec. 31) to make the withdrawal.

Take the Distribution (or Pay a Fine) 

Until this point the government has provided a tax break on these accounts, either as an income tax deduction or by giving you the opportunity to claim growth tax-free. Once you reach the designated age, though, if you fail to take an RMD or withdraw too few funds, the IRS will apply a 50 percent penalty to the amount that should have been removed.

Leaving a Legacy

Spouses who are the sole designated beneficiary of an IRA have the option to treat that IRA as their own, but non-spouse beneficiaries (including children) must consult actuarial life tables or withdraw the entire balance after five years following the original owner's passing. 

Have questions about RMD rules and how they may apply to your retirement accounts? Reach out for assistance.

70 ½: The Number to Know

The IRS deems you 70 ½ exactly six months after your 70th birthday. Once you reach this age, you have until April 1 of the following year to take a required minimum distribution from most IRAs and defined contribution plans like 401(k)s. Once you begin taking RMDs, you must continue taking them every year, though you have until the last day of each calendar year (Dec. 31) to make the withdrawal.

Take the Distribution (or Pay a Fine) 

Until this point the government has provided a tax break on these accounts, either as an income tax deduction or by giving you the opportunity to claim growth tax-free. Once you reach the designated age, though, if you fail to take an RMD or withdraw too few funds, the IRS will apply a 50 percent penalty to the amount that should have been removed.

Leaving a Legacy

Spouses who are the sole designated beneficiary of an IRA have the option to treat that IRA as their own, but non-spouse beneficiaries (including children) must consult actuarial life tables or withdraw the entire balance after five years following the original owner's passing. 

Have questions about RMD rules and how they may apply to your retirement accounts? Reach out for assistance.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment adviser representative of and securities and advisory services offered through Cetera Advisor Networks LLC, member FINRA/SIPC. Cetera is under separate ownership from any other named entity. This material is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought. The views depicted in this material are for information only and are not necessarily those of Cetera Advisor Networks LLC. They should not be considered specific advice or recommendations for any individual. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.

 

https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-req...

 

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