The RMD Mistake That Costs 401(k) Owners a 25% Penalty

Here’s a rule that’s cost retirees real money, and hardly anyone sees it coming.

If you’re 73 or older and you own a couple of IRAs, the IRS lets you add up what you owe across all of them and take the entire withdrawal from just one account. Tidy. Convenient.

Now assume that same convenience covers the 401(k) you left behind at a job three employers ago. That assumption is where a 25% penalty hides.

Your IRAs are forgiving

A required minimum distribution — an RMD — is the money the IRS forces you to pull out of most retirement accounts each year once you turn 73, so it can finally tax savings you’ve sheltered for decades. The deadline is Dec…

Read the full article at MONEYTALKSNEWS.COM