Traditional IRAs offer a number of appealing benefits, including a tax deduction when you put your money in.
But starting April 1 following the year you turn 70 1/2, it’s time to pay the piper in the form of required minimum distributions (RMDs).
Whether or not you want or need the money right then, the law requires you to take out a certain amount each year and pay taxes on it.
To make sure you honor your RMD requirement, the tax law levies a 50 percent penalty on the amount you were required to withdraw but failed to withdraw. That’s an attention-getting penalty.
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