SMITHFIELD – Fidelity Investments is urging individual retirement account owners aged 70 1/2 years and older to start thinking about taking a required minimum distribution before year’s end.
The last day to take an RMD is Dec. 29, as Dec. 31 falls on the weekend, and investors who fail to do so could be subject to an IRS penalty totaling 50 percent of the amount not taken.
“That’s a significant hit, especially if this money is being used to cover living expenses,” according to the investing company.
Fidelity released a survey showing almost half of its nearly 1 million IRA customers had not taken any amount from their IRAs toward the RMD for 2017. RMDs are mandatory of IRA holders of a certain age.
The company, with offices in Smithfield, provides its customers an RMD estimate each year, and has automatic withdrawals to help people avoid missing deadlines. Fidelity has realized a nearly 11 percent year-over-year increase in customers using the service.
Fidelity also says investors looking to lower their taxable income can also give the RMD to charity. The amount taken out will count toward the RMD for the year and can be excluded from taxable income.
Eli Sherman is a PBN staff writer. Email him at Sherman@PBN.com, or follow him on Twitter @Eli_Sherman.
