There are often mistakes involved with the date that senior citizens are supposed to start taking required minimum distributions (RMDs) from their IRA accounts. “The required beginning date for RMDs is generally April 1, following the year the client turns age 70 ½, but after that RMDs are due by year end.” A person could be subject to a 50% penalty for any shortfall, but the IRS can generally waive that penalty if that person shows good cause. People that have multiple retirement accounts that are subject to RMDs will need to be extra careful when estate planning. This column discusses the exceptions for company plans that have RMDs. The beneficiary will often be the one who takes year-of-death RMDs. Clients need to make sure that all of their beneficiary forms are up-to-date and that avoid making inherited IRA mistakes.
See On Wall Street, Don’t Make These Common IRA Distribution Mistakes, Nasdaq, December 2, 2015.
