End-of-Year Deadline Approaching for Baby Boomers

NEW YORK, Dec. 5, 2016 /PRNewswire/ -- The time has come when the eldest of baby boomers must start taking distributions from their retirement accounts. Required minimum distributions, or RMDs, start at age 70½. This significant milestone could affect the roughly 2.5 million baby boomers who are celebrating their 70^th birthday in 2016. For most IRA owners, RMDs are due by the end of the year. However, when taking your first distribution, the rules are a bit different, and special consideration should be taken before making any moves. Ed Slott, CPA, a nationally recognized IRA expert, founder of Ed Slott and Company, and creator of www.IRAHelp.com, is alerting the eldest of the baby boomer generation of the December 31 deadline to decide whether to take that first RMD this year.

"Believe it or not, knowing when and how to withdraw your RMDs is like taking a calculus class for most people—it can get very confusing," says Slott, who was named "The Best Source for IRA Advice" by The Wall Street Journal. "For the baby boomers preparing to take their first RMD, the process is even more complicated. It's imperative they have the correct information and guidance, or they could be subject to higher income tax rates or even face penalties as high as 50 percent of the amount they were required to withdraw!" Slott suggests boomers take note of the following advice:

WHO: For the roughly 2.5 million baby boomers that celebrated their 70^th birthday in 2016, required minimum distributions will kick-in at age 70½. The end of the year is the deadline for most IRA owners to take their RMDs, but this first wave of baby boomers has the option to defer their first RMD until April 1 of next year.

WHAT: Navigating RMDs can be extremely complicated, and several factors should be considered when timing the first withdrawal, including income level. Deferring the first RMD may not necessarily be helpful and could potentially lead to a higher income tax bracket, as the second RMD would still be required in 2017 as well. But with the end of the year quickly approaching, decisions will need to be made soon regarding RMDs that have not already been taken. Missing the deadline or filing incorrectly can result in a penalty of up to 50 percent of the missed required distribution amount.

HOW: Working with a qualified professional who has received specialized training in IRA planning and who can navigate complex tax rules can help guide one through the process. An IRA-trained advisor understands the complexities of IRAs and RMD planning and can help boomers facing their first RMDs avoid mistakes that could result in losing a portion of their retirement savings unnecessarily to fees and taxes.

Ed Slott and Company has a database of qualified professionals nationwide who can help. These advisors are exclusively trained by Ed Slott and are part of the Ed Slott Elite IRA Advisor Group. You can find an advisor in your area by visiting: https://www.irahelp.com/find-an-advisor

ABOUT ED SLOTT AND COMPANY, LLC: Ed Slott and Company, LLC is the nation's leading provider of technical IRA training for financial advisors, CPAs and attorneys. Membership to Ed Slott's Elite IRA Advisor Group^SM is limited to the top financial professionals in the United States, with nearly 400 professionals dedicated to the ongoing training and mastery of advanced retirement account and tax planning laws and strategies. Mr. Slott is a nationally recognized IRA distribution expert, best-selling author, professional speaker, and host of several public television specials, including "Ed Slott's Retirement Road Map!" Visit www.IRAHelp.com for more information.

Alana Kohl
AdvisorPR®
(702) 685-7450

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SOURCE Ed Slott and Company, LLC