Your Required Minimum Distribution (RMD) Deadline Is Approaching -- Here's What Retirees Must Do Before Dec. 31

Core Points - The article discusses the importance of meeting the required minimum distribution (RMD) deadlines for tax-deferred retirement accounts like 401(k) and traditional IRA [1][2] - RMDs begin at age 73, allowing the IRS to collect taxes on retirement savings after providing initial tax breaks [2] - The deadline for RMD withdrawals is approaching, with specific rules for first-time RMD takers [2] RMD Calculation - RMD amounts are calculated based on age and retirement account balances from the previous year [4] - The life expectancy factor (LEF) is used to determine the RMD, with most individuals using the uniform lifetime table [5] - For example, an 80-year-old with a $1 million balance would have an RMD of $49,505, calculated by dividing the account value by the LEF of 20.2 [6] Penalties for Non-Compliance - Failing to take the required RMD results in a penalty of 25% of the amount not withdrawn [7] - If the mistake is corrected within two years, the penalty can be reduced to 10% [8] - To correct a missed RMD, IRS Form 5329 must be submitted, and penalties may be waived under certain circumstances [9]