Of a Certain Age? You May Need to Withdraw Money From a Retirement Account

After saving for retirement for years, when you turn 70 ½ years old, the Internal Revenue Service requires that people start taking their RMD (required minimum distribution) out of their retirement accounts which could be an IRA or 401(k). If you fail to take an RMD you may face a steep penalty. For the complete NYT article, follow our link. Read More. Of a Certain Age? You May Need to Withdraw Money From a Retirement Account By Ann Carrns | The New York Times You may be thinking about holiday gifts and New Year’s resolutions. But if you’re old enough Continue Reading

Be Aware of the Kiddie Tax Before Leaving an IRA to Children

Grandparents may be tempted to leave an IRA to a grandchild because children have a low tax rate, but the “kiddie tax” could make doing this less beneficial. An IRA can be a great gift for a grandchild. A young person who inherits an IRA has to take minimum distributions, but because the distributions are based on the beneficiary’s life expectancy, grandchildren’s distributions will be small and allow the IRA to continue to grow. In addition, children are taxed at a lower rate than adults—usually 10 percent. However, the lower tax rate does not apply to all unearned income. Enacted Continue Reading