RMD Deadline Looms: Avoid IRS Penalties
Update: 2025-12-09
Description
As the year ends, many retirees and beneficiaries must take Required Minimum Distributions (RMDs) from their retirement accounts to avoid a 25% IRS penalty. Fidelity data shows that over half of investors havent yet made their RMDs, with a significant portion being from inherited IRAs. Experts advise taking RMDs as soon as possible to avoid complexity and potential penalties. The rules for inherited IRAs are particularly challenging, with a ten-year rule and new yearly RMD requirements for non-spouse beneficiaries. Missing the December 31st deadline can result in a 25% penalty, but it can be reduced to 10% if corrected within two years. The IRS may also waive the penalty if the error was reasonable and corrected.
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