Your retirement fund is accumulating interest each year, and perhaps you have decided to leave that cash untouched until you really need it one day. nike air huarache ultra hombre With people living longer and healthier lives, many of us are choosing to work past the age at which our parents had already retired. Some of us don’t even need to access our retirement funds yet! But you might be surprised to learn that when you reach age 70 ½, you must being taking required minimum distributions (RMDs) whether you want to or not! What happens if I don’t take my RMD? If you don’t take your required minimum distribution once you are required to do so, you will be charged a penalty of 50 percent of the amount you should have withdrawn. Nike Air Max 90 Dames blauw
Ouch! Won’t taking my RMD increase my federal income tax liability? That’s a fair question, since taking distributions from a retirement plan essentially increases your income. adidas ultra boost However, it will depend upon the type of account you hold. adidas superstar 2 damskie Distributions from non-Roth accounts will be taxable at your usual rate, and a large distribution could indeed bump you up to a higher tax bracket. If you receive distributions from a Roth account, though, that income will not be subject to income taxes. lunette de soleil ray ban Is there any way to avoid taking RMDs? The RMD rule applies to all non-Roth retirement accounts, with some special exceptions for very limited circumstances. Joey Bosa The rule also applies to Roth 401(k) funds, but not Roth IRAs. Nike Air HUARACHE Pas Cher One way to avoid taking required minimum distributions is to roll your money into a Roth IRA. GS Air Jordan 5 When should I begin taking my RMDs? Once you turn age 70 ½, you have until the end of the following year to take your first RMD. From that point on, each year’s RMD must be taken before December 31. However, depending upon your exact birthday, waiting too late to take your first distribution could mean that you take two distributions in one year. Washington State Cougars Jerseys This might trigger a heavier tax burden, so it’s important to plan that first RMD well in advance. For more information about required minimum distributions from your retirement accounts, or for help with your overall retirement strategy, contact our office to schedule an appointment.