Taking Your RMD in January vs. December: Which Strategy Makes Sense for You?

If you own a tax-deferred account like a 401(k) or traditional IRA, you must begin withdrawing from those accounts the year you turn 73 years old. These are called required minimum distributions (RMDs).You must take your RMD by Dec. 31 to avoid penalties. The only exception is the year you turn 73, in which case you'd have until April 1 of the following year to take your RMDs. Failing to take your RMDs will result in a penalty of 25% of the amount you failed to withdraw. If your mistake is corrected within two years, the penalty may be reduced to 10%.While some people choose to get their RMDs out of the way early in the year, others prefer to handle them at the last minute. Neither is right or wrong, but which route is best for you?Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool