Saturday, October 23News That Matters
Shadow

Tag: boomers

These funds help baby boomers avoid a 50% tax penalty

These funds help baby boomers avoid a 50% tax penalty

Finance
Millions of baby boomers will have to take out money from their individual retirement accounts and 401(k) plans this year or face a 50 percent tax penalty. Known as required minimum distributions, these mandatory withdrawals can be a pain for older investors to figure out — and now some retirement account providers are working on strategies and services to help take the guesswork out of the process. Generally, you have to start taking withdrawals from your traditional IRA, SIMPLE IRA, SEP IRA or retirement plan accounts when you reach age 70½. If you are still working, some 401(k) plans allow you to defer RMDs from those plans until you retire.You catch a break on your first RMD, which you can defer until the following year. That means if you turn 70½ this year, you have until April 1, 201...