The end of the year is a good time for those over age 70 to think about their required minimum distributions. Required minimum distributions are something you have to take, but what you do with the money is up to you.
Key Takeaways:
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Those who have contributed to an IRA, SEP IRA SIMPLE IRAs and traditional 401(k)s have a required minimum distribution (RMD) at age 70 ½. Failing to withdraw the minimum amount in the year you turn 70 ½ will result in a 50% penalty.
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If you don't need the RMD for living expenses, try reinvesting it.
- You can also donate the RMD directly to charity which would result in the distribution being tax-free.
Read more here: http://www.usatoday.com/story/money/personalfinance/2016/11/15/rmd-penalty-required-minimum-distribution-invest/93240514/
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