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Once you reach the age of 72, by law you must begin taking required minimum distributions (RMDs) from your retirement accounts. Due to the number and complexity of the rules around your RMD, it's easy to make a costly error. In this video, Kyle Stacey, CFP® explains 5 of the most expensive RMD mistakes and how to avoid them.

IRS resources:
https://www.irs.gov/publications/p590...
https://www.irs.gov/pub/irs-tege/unif...

Partial Transcript:

Many of you throughout your working careers have saved to a tax-deferred retirement account. That may be a 401(k), 403(b), maybe an IRA, or even a 457, and eventually, once you hit age 72, the IRS has a mandate called a required minimum distribution that forces you to take money out of that account, pay taxes on that distribution, and recycle that money into the economic system. With this responsibility comes a lot of mistakes that we commonly see. One of the biggest mistakes with the RMD is just failure to take it, which results in one of the largest tax penalties in the code. It's a 50% penalty and it's still fully taxable to you.

#2 - People just don't use the proper balance in calculating their RMD.

#3: Understand the rules with 401(k) plans are slightly different than they are with IRAs.

#4: People don't coordinate their charitable endeavors with their required minimum distribution.

#5: Spouses combine RMDs together.

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CFP® - The CERTIFIED FINANCIAL PLANNER™ certification is by the Certified Financial Planner Board of Standards, Inc. To attain the right to use the CFP® designation, an individual must satisfactorily fulfill education, experience and ethics requirements as well as pass a comprehensive exam. Thirty hours of continuing education is required every two years to maintain the designation.

AIF® - Accredited Investment Fiduciary designation is administered by the Center for Fiduciary Studies fi360. To receive the AIF Designation, an individual must meet prerequisite criteria, complete a training program, and pass a comprehensive examination. Six hours of continuing education is required annually to maintain the designation.

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