This time of year always seems to go by the fastest. Once the clocks are set back and the holidays are here, our daily activities pick up the pace as if we just moved to New York City. A friendly reminder for those over age 70 1/2 , or beneficiaries that have inherited IRAs: don't forget to take your Required Minimum Distribution (RMD). If you neglect to do so before December 31, our good friends at the IRS will penalize you with a 50% tax on the amount that was to be withdrawn. Plans subject to RMDs include all types of qualified plans, such as Traditional IRAs, 401(k)s, 403(b)s, SEPs, and Simple IRAs.

Not sure what your RMD is? Consider using a calculator. You'll need your account balance at of the end of the previous year, as well as your age at year-end. Whether you use the money for everyday expenses, property taxes, or for contributions to your favorite charity, make sure you have taken your full distribution by the end of the year. Buy that new car, create a 529 plan for your grandkids, do whatever you want, just make sure you have taken the proper steps to avoid an unnecessary tax from the IRS.

Continuously taking a distribution from your retirement savings can be scary if you have to draw down your principal each time. Speak with a financial professional to learn how to develop a consistent stream of income, so when it comes time to take your distribution, you can take it from the cash generated without having to dip into your invested principal.

Ethan Wade, Financial Advisor


(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).