{"id":1081,"date":"2019-08-01T11:09:56","date_gmt":"2019-08-01T18:09:56","guid":{"rendered":"https:\/\/udirectira.com\/?p=1081"},"modified":"2022-06-27T20:09:08","modified_gmt":"2022-06-27T20:09:08","slug":"required-minimum-distributions","status":"publish","type":"post","link":"https:\/\/udirectira.com\/required-minimum-distributions\/","title":{"rendered":"Required Minimum Distributions"},"content":{"rendered":"\r\n<figure class=\"wp-block-image\"><img decoding=\"async\" width=\"321\" height=\"157\" class=\"wp-image-1082 lazyload\" data-src=\"https:\/\/udirectira.com\/wp-content\/uploads\/2019\/08\/RMD.jpg\" alt=\"\" data-srcset=\"https:\/\/udirectira.com\/wp-content\/uploads\/2019\/08\/RMD.jpg 321w, https:\/\/udirectira.com\/wp-content\/uploads\/2019\/08\/RMD-300x147.jpg 300w\" data-sizes=\"(max-width: 321px) 100vw, 321px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 321px; --smush-placeholder-aspect-ratio: 321\/157;\" \/><\/figure>\r\n\r\n\r\n\r\n<p>When you have a pre-tax retirement account (like a Traditional IRA, SEP IRA or 401(k)) the time will come when you will need to begin to take Required Minimum Distributions or RMDs.<\/p>\r\n\r\n\r\n\r\n<p>RMDs start in the year that the account-holder turns 70.5 years of age.\u00a0 That is, six months after your 70<sup>th<\/sup> birthday.<\/p>\r\n\r\n\r\n\r\n<p>When you hit this RMD age you need to begin taking distributions.\u00a0 These distributions need to be taken by April 1<sup>st<\/sup> following the year you attain the age of 70.5.\u00a0 This date is called the \u201cRequired Beginning Date\u201d or RBD.\u00a0 The RMD required withdrawal is based on the balances of all your pre-tax retirement accounts combined.\u00a0<\/p>\r\n\r\n\r\n\r\n<p>It\u2019s important to note that once you reach this age you can no longer make contributions to your pre-tax retirement accounts.\u00a0 You can still make contributions to a Roth IRA, however, so long as you have earned income and that income does not exceed the IRS limits.<\/p>\r\n\r\n\r\n\r\n<p>It\u2019s a great idea to get some tax-planning advice as you near this milestone, as you will need to withdrawal (and pay tax on) your IRA savings.\u00a0 You can find a RMD worksheet on the IRS\u2019 website here \u2013<a href=\"https:\/\/www.irs.gov\/pub\/irs-tege\/uniform_rmd_wksht.pdf\">https:\/\/www.irs.gov\/pub\/irs-tege\/uniform_rmd_wksht.pdf<\/a>\u00a0\u00a0\u00a0<\/p>\r\n\r\n\r\n\r\n<p>Be sure to stay on top of taking these distributions because failing to do so leads to an \u201cExcess Accumulation Penalty Tax\u201d IRC Sec, 4974.\u00a0 This penalty is <strong>50 percent<\/strong> of the amount that should have been taken out of the IRA but was not. \u00a0<\/p>\r\n\r\n\r\n\r\n<p>There are exceptions to this penalty and you can apply for a waiver by filling out IRS form 5329 &#8211; <a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/f5329.pdf\">https:\/\/www.irs.gov\/pub\/irs-pdf\/f5329.pdf<\/a><\/p>\r\n\r\n\r\n\r\n<p>If the IRS agrees with you that your failure to take a withdrawal was a mistake, they could waive the penalty tax amount.<\/p>\r\n\r\n\r\n\r\n<p>Think 70.5 is too young to start tapping into your retirement dollars Recently, the\u00a0<em>Retirement Security &amp; Savings Act\u00a0<\/em>(S. 1431) was introduced.\u00a0 This bill proposes to raise the RMD age to\u00a072 in 2023 and age 75 by 2030.\u00a0 You can read the full bill here &#8211; <a href=\"https:\/\/www.portman.senate.gov\/sites\/default\/files\/2019-05\/Retirement%20Security%20%26%20Savings%20Act%20-%202019%20final_0.pdf\">https:\/\/www.portman.senate.gov\/sites\/default\/files\/2019-05\/Retirement%20Security%20%26%20Savings%20Act%20-%202019%20final_0.pdf<\/a><\/p>\r\n","protected":false},"excerpt":{"rendered":"<p>When you have a pre-tax retirement account (like a Traditional IRA, SEP IRA or 401(k)) the time will come when you will need to begin to take Required Minimum Distributions or RMDs. RMDs start in the year that the account-holder turns 70.5 years of age.\u00a0 That is, six months after your 70th birthday. When you&hellip;<\/p>\n","protected":false},"author":5,"featured_media":9262,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1081","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Required Minimum Distributions - uDirect IRA Services, LLC<\/title>\n<meta name=\"description\" content=\"RMDs are a standard requirement once you reach a certain age. 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