Mistake: Ignoring Your RMD
Forgetting or ignoring to take your RMD is the priciest mistake you can make. The penalty for not doing it is up to 50% of the RMD amount. That can be very costly on top of the taxes you’re already paying. Even though this shouldn’t happen, we all make mistakes.
Maybe you were preoccupied with a family matter, or you were away on vacation, and it slipped your mind. Whatever your reason, if you forgot to take an RMD, the one thing you should never do is pretend that it didn’t happen.
In most cases, the IRS can come back and set the 50% penalty if you do that. In any case, the good news is there are ways to fix this error, and a CPA can help you. As you’ve probably realized already, IRA planning is much more complex than many people realize.
Let’s be honest. Deciding what strategies are best for your IRA intersects with every area of planning, from tax to investment and even to estate planning.
A wise retirement starts with active preparation because time spent planning offers you the knowledge you need to make smart decisions and avoid expensive financial mistakes down the line.
We hope this article has been helpful. But we have many more like it. We also recommend you read: 6 Things To Do With Your 401(k) Once You Retire
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