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Diversified Financial Consultants President Dominick Tavella on an IRS penalty facing retirees.
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If you've got a retirement plan you're gonna want to listen up your nest eggs could get slapped with a percent tax penalty.
If the IRS -- you breaking just one little rule joining me now with important tips keep your money -- -- a ballot founder and president of diversified financial consultants.
-- welcome back to the show thank you so -- we're talking about this last week we didn't have time to get into it I think this is critical.
So there is -- rule required minimum distribution for the IRS has.
If you are in retirement what seventy.
Yet that the ruled required minimum distributions have to do with the axis that you have been in IRA account retirement account.
You've reached age savvy -- half.
The IRS congress want you to take the money out of -- -- and retirement account you can't just let it sit there I can't tell a lot of people do polls have been around a long time -- people know about it being used -- People forget about it why.
Well we start with it said -- -- Half -- would -- of people 708090.
Years old and believe in our practice we have lots of 79 -- that's a blessing.
But all of a sudden getting this complex.
Confusing paperwork in the mail that many people really understand the calculation how works out.
It's a little bit difficult to stay in compliance it's up 50%.
Penalty if you don't take that money out of the IRA account.
OK so let's back up just at five paces here.
Because.
So these are folks who were retired correct they're living on a fixed income never probably trying to be very very -- when they're much they're seniors.
For seniors and better right and this is a rule that hasn't been enforced.
I've necessarily all that much in the past so people have been able to slide on this may be a little bit but now you say.
The IRS warning were coming after you were coming after you mr.
75 year old were coming -- -- is eighty year old.
If you're not taking out the -- we are in the past -- -- Very difficult for the -- actually find these people I mean of reporting wasn't that great.
Now every custodians on the planet a bank a brokerage account sends out form 54988.
This reports to the IRS what your year end balance was.
In your retirement accounts and now they now so now they now so whether sitting at a bank a brokerage account and -- -- -- doesn't matter that.
Document reports of the IRS the total of your retirement accounts and you better be complying with its role.
So tonic T think IRS from the federal government in general is just trying to get their handsome Harvard though is that let's look at at the end of the day it really is an issue of they need the money right and they go where the money is and we have the clients -- -- with -- very very substantial retirement accounts.
The -- -- -- be pretty drool.
I think really though this is about getting the individual actually withdraw the money out of the IRA and -- federal and state income tax on that -- and just to be clear here we're talking about profit sharing plans 401K is for a three B is for 57 and of course.
The traditional IRA all these plants are subject to this role VMware biggest problem is a better than usual may have all these different plans right at an IRA -- for won't take.
You have to look in total -- the total value of the pocket to the calculations of the aren't.
Dominique you're my head here thank -- you have great day.
