Smart Retirement: Avoid the 5 Biggest IRA RMD Mistakes
Next time you check your 401(k) or IRA balance ask yourself this, "How much of this money is actually mine?" There's a big chance that during your retirement a good chunk of that money is going to go to Uncle Sam. That's because when you turn 70½ the IRS requires that you take a required minimum distribution (RMD) from your qualified retirement savings, such as your traditional IRA, 401(k) and 403(b). You'll have to take that distribution every single year until the account is depleted or you pass away.
That's right, the IRS wants their tax cut for the rest of your life, your spouse's life and possibly your beneficiaries' lives. If you don't take your RMDs, the IRS will send you a love letter in the mail saying you owe big penalties. I'm going to share with you the five biggest mistakes to avoid when it comes to your RMDs, because even the simplest mistakes can cost you a lot of money.
