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RMD Retirement Rule Will Be Back with a Vengeance in 2021

December 26, 2020

From the Motley Fool website

The money in your retirement savings account generally can’t sit there forever. Unless you have a Roth IRA, you’re obligated to remove a portion of your account balance each year once you turn 72. These obligatory withdrawals are known as required minimum distributions, or RMDs, and they’re calculated based on your savings balance and life expectancy.

Failing to take RMDs has serious consequences — namely, a 50% tax penalty on any amount you don’t remove. For example, if you’re liable for a $10,000 RMD and you only withdraw $6,000, you’ll forfeit 50% of the remaining $4,000 to the IRS, resulting in a $2,000 loss.

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As always with Motley Fool articles, the last paragraph, “The $17,166 Social Security bonus most retirees completely overlook” is a lead in advertisement.

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