{"id":956,"date":"2015-03-23T18:30:38","date_gmt":"2015-03-23T18:30:38","guid":{"rendered":"http:\/\/walltitus.wpengine.com\/?p=956"},"modified":"2019-07-21T04:30:41","modified_gmt":"2019-07-21T04:30:41","slug":"important-april-1st-deadline-for-retirement-account-holders","status":"publish","type":"post","link":"https:\/\/walltitus.com\/important-april-1st-deadline-for-retirement-account-holders\/","title":{"rendered":"Important April 1st Deadline for Retirement Account Holders"},"content":{"rendered":"

via MSN Money\/ Marketwatch<\/a><\/p>\n

An important deadline is fast approaching for people required to tap their retirement savings for the first time. And at least one set of numbers indicates that many investors could miss it.<\/p>\n

If you turned age 70\u00bd at any point in 2014, you must take — by April 1 of this year \u2013 your first \u201crequired minimum distribution\u201d from your retirement accounts \u2013 generally those with tax-deferred contributions. These include, among others, IRAs, 401(k)s, 403(b)s and 457(b)s.<\/p>\n

(There are two exceptions. The rules don\u2019t apply to the original owners of Roth IRAs. And if you continue to work beyond age 70\u00bd, you can generally delay withdrawals from your employer\u2019s retirement plan until after you retire.)<\/p>\n

As the term indicates, RMDs are the minimum amounts that the owner of a retirement account must withdraw annually. But rules regarding the deadline for the initial withdrawal often confuse people.<\/p>\n

Normally, annual withdrawals must be made by Dec. 31. But with the first distribution, the Internal Revenue Service gives you some extra time: You have \u2013 if need be \u2013 until April 1 of the year following the calendar year in which you turn 70\u00bd to take your first RMD. (Of course, you don\u2019t have to wait until April 1; you can take the RMD before that deadline.)<\/p>\n

There\u2019s also the added confusion of the April 15 deadline for filing tax returns. Some people invariably mistake April 15 as the deadline for their first RMD.<\/p>\n

At Fidelity Investments \u2013 as of Dec. 26, 2014 \u2013 fully 59% of the company\u2019s investors eligible to take their first RMD from their IRA in 2014 hadn\u2019t yet taken the full amount required. More worrisome, of those, 43% hadn\u2019t taken any RMD to date for the year.<\/p>\n

Translation: Many investors, according to Kim Reingold, a spokeswoman for Fidelity, \u201ccontinue to leave themselves vulnerable to significant tax penalties when their withdrawals aren\u2019t made in a timely fashion.\u201d<\/p>\n

How significant? According to the IRS, \u201cIf an account owner fails to withdraw a RMD, fails to withdraw the full amount of the RMD, or fails to withdraw the RMD by the applicable deadline, the amount not withdrawn is taxed at 50%.\u201d<\/p>\n

In short, if you\u2019re required to take your first distribution from a retirement savings account by April 1 and haven\u2019t done so, you need to act quickly. You can calculate the size of your RMD using, among other resources, a Fidelity calculator (which also has a link to additional information about RMDs) or worksheets on the IRS website. The IRS website also has a good guide to RMDs and to frequently asked questions about such withdrawals.<\/p>\n

(Note: If you have multiple IRAs, you should calculate the RMD separately for each account \u2013 but you can withdraw the total amount from a single IRA. That said, if you have different types of retirement plans \u2013 such as an IRA and 401(k) \u2013 RMDs must be taken separately from each kind of plan.)<\/p>\n

And, of course, contact your IRA custodian or retirement-plan administrator. They\u2019re waiting to hear from you.<\/p>\n","protected":false},"excerpt":{"rendered":"

via MSN Money\/ Marketwatch An important deadline is fast approaching for people required to tap their retirement savings for the first time. And at least one set of numbers indicates that many investors could miss it. If you turned age 70\u00bd at any point in 2014, you must take — by April 1 of this […]<\/p>\n","protected":false},"author":1,"featured_media":831,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[13,9,8,41,17,1,33],"tags":[18,103,38,21,10,81,15,16,55,104,105,42,32,23],"_links":{"self":[{"href":"https:\/\/walltitus.com\/wp-json\/wp\/v2\/posts\/956"}],"collection":[{"href":"https:\/\/walltitus.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/walltitus.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/walltitus.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/walltitus.com\/wp-json\/wp\/v2\/comments?post=956"}],"version-history":[{"count":0,"href":"https:\/\/walltitus.com\/wp-json\/wp\/v2\/posts\/956\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/walltitus.com\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/walltitus.com\/wp-json\/wp\/v2\/media?parent=956"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/walltitus.com\/wp-json\/wp\/v2\/categories?post=956"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/walltitus.com\/wp-json\/wp\/v2\/tags?post=956"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}