What are RMD’s and how can you make sure they are complete?
Another item on your year-end checklist is making sure that your required minimum distributions are completed. There can be a variety of different types of accounts that this affects so we really want to make sure that we don’t forget about something. This is part of our personal year-end tax planning checklist you can download. In this video, we discuss what RMD’s are and how you can make sure they are complete:
MICHELLE SMALENBERGER, CFP®
Here is a list of different accounts you may have that are common with many people. Perhaps you have a few different IRAs at the same custodian or at different custodians. Then let’s assume you inherited an IRA from a deceased spouse. Then maybe you have an annuity that is titled in an IRA. These accounts all need to have their RMD taken. With this list of accounts you can combine the RMD and have it taken from one account. Or you can take each RMD from each respective account. The reason these can be taken from one account is because the RMD factor will remain the same for calculating the RMD amount.
Now, here is a list of different accounts that you would need to withdraw the RMD from directly for each account. This list includes accounts like an Inherited IRA from anyone other than your spouse, an Inherited Roth IRA, an old 401(k), an old Roth 401(k).
One rule that applies to all of these accounts is that the IRS assesses a 50% penalty on the balance not taken of your RMD required by December 31st.
We are always happy to help you talk through these items that you want to make sure are done on time!
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I have a passion for helping others develop a path to financial success! Through different lenses on your financial picture, I want to help create solutions with you that are thoughtful of today and the future. I have seen in my life the power of having a financial plan while making slight changes of direction from time to time. I believe you can experience freedom from anxiety and even excitement when you know your finances are on track.