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Susan Brandeis
ABOUT Susan

Susan is a CERTIFIED FINANCIAL PLANNER™ professional who earned her BA in Financial Services from San Diego State’s College of Business Administration, also receiving a SDSU Personal Financial Planning Certificate. In addition, prior to working with a fee-only advisory firm, Susan held the FINRA series 7 and 63 securities registration. Until joining Pure Financial Advisors, Susan [...]

Susan Brandeis, CFP® explains the repercussions of not taking the required minimum distribution (RMD) from your individual retirement account.

Transcription:

Hi, I’m Susan Brandeis, CERTIFIED FINANCIAL PLANNER™ and Director of the Financial Planning Department here at Pure Financial, and this your Question of the Week.

This week’s question is: is there a penalty for not taking a required minimum distribution from your IRA? The answer is yes. Everyone is required to take a distribution from their IRA once they’ve reached the age of 70 1/2.

However, if you don’t take your RMD, the IRS will penalize you 50%.

So what that means is if your required minimum distribution is 20,000, and you don’t take it, your tax penalty alone is $10,000. It’s one of the most egregious tax penalties in the IRS code, so make sure to take your distribution on time, and as always, consult a tax professional if you have further questions.

I’m Susan Brandeis, and that was your Question of the Week.