What is a Required Minimum Distribution?

If youve been saving all your life for retirement using a tax-deferred account such an IRA or 401k eventually the IRS is going to want the taxes on that money whether you want to use it or not.
These are called Required Minimum Distributions they start at age 72 and there are steep penalties for not taking them. This video describes what Required Minimum Distributions are how theyre calculated when you need to start taking them and the consequences of not doing so. 2023 UPDATE: The age when RMDs are required to start has been increased to 73 effective 2023.
Also the penalty for not taking RMDs has been reduced to 25 of the shortfall and if the shortfall is corrected in a timely manner further reduces to 10. CORRECTION slight: Sharp-eyed viewers might notice that the Distribution Codes on Alfreds 1099-R Forms are 1 for early withdrawal.
The Codes should be 7 for normal distribution. 0:00 Introduction 0:42 What is a Required Minimum Distribution? 2:35 RMD Examples 4:37 RMD Timing 5:23 Consequences of not taking RMDs 6:04 Conclusion For a general overview of IRA distributions click here: Resources and Information: IRS Publication 590-B Distributions from Individual Retirement Arrangements Contains all three Life Expectancy Factor tables: Kiplinger.com: the Basics of Required Minimum Distributions: 12 Things You Must Know About RMDs: smartasset.com: How to Calculate Required Minimum Distribution RMD: The Tax Geek on Twitter: taxgeekusa The Tax Geek on Reddit: www.reddit.comraskataxgeek Image and video sources: Storyblocks.com Pexels.com The Images of Alfred Zelda and younger Zelda were generated by thispersondoesnotexist.com and any resemblance between these images and any persons living or dead is coincidental and not intended. Intro Music: Bluesy Vibes - Doug Maxwell - YouTube Audio Library Outro Music: Modern Attempt - Track Tribe via YouTube Audio Library DISCLAIMER: This video is for educational and informational purposes only.
It is not intended to render tax advice or investment advice for individual situations.
If you have questions regarding your particular situation please consult with a qualified tax or investment professional. The information in this video is current as of date of publication and is subject to changes.

Источник: rutube.ru