Required Minimum Distributions
Continuing to participate in your deferred compensation plan through retirement may be a good idea, potentially continuing to grow your investments. There are limits though, to how long you can keep your money in the plan before you have to take annual minimum withdrawals. If you don’t take timely required withdrawals from your account, you’ll be subject an IRS 50 percent tax penalty on the amount that should have been withdrawn – referred to by the IRS as an excise tax.1
When you retire, the IRS generally requires you to start taking required minimum distributions (RMD) payouts from your account by April 1 in the year after you turn 72. If you remain employed after age 72, you may not be required to take a RMD until after you retire.
Visit the IRS website to review the frequently asked questions about RMDs, and calculate what your RMD may be.
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Please contact us if you have questions about RMDs in retirement.
1 Internal Revenue Code Section 4974
Investing involves market risk, including possible loss of the money invested.