They say that nothing is sure in this life except death and taxes.
The IRS will get their (your) money, sooner or later, and sometimes they aren’t willing to wait. If you haven’t already reached the age of 70, you may not have heard of something they call a Required Minimum Distribution – here is how it works:
Any money you saved in an IRA was not tax free, only tax deferred -and the IRS won’t wait around forever.
Once you reach the age of 70 1/2, they require you to remove a certain percentage of your savings from your IRA. You can do whatever you want with that money, but you will pay taxes on it.
How much you have to remove, and how much tax you will owe, can be calculated HERE.
I get my RMD check as early as possible each year. That way I get to enjoy my money for a little over a year before the taxes come due. My check came yesterday, and Honey’s (her first) came last week – I’ll be putting them in the bank today.