Avoid Hefty RMD Penalties: Key Deadlines for Retirees
Update: 2025-12-22
Description
Retirees Beware: Missing RMDs Could Cost Billions in Penalties - Vanguards new research reveals that millions of Americans aged 73 and older may face hefty penalties due to missed required minimum distributions (RMDs) from accounts like 401(k)s and traditional IRAs. In 2024, 6.7% of eligible Vanguard IRA holders skipped their RMDs, leading to average penalties of $1,160 at 10% or $2,900 at 25%. Nationwide, this could result in $678 million to $1.7 billion in avoidable taxes annually. Those turning 73 this year have until April 1, 2026, for their first RMD, while those 74 and up must act by December 31, 2025, to avoid these penalties.
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