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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75873  
Subject: Re: Retirement money advice Date: 12/16/2004 8:42 PM
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I could not find anything on the Tax Board FAQ; maybe I missed it. You might try posting a question there regarding RMDs.

Not much on the REHP FAQ either; again, maybe I missed it.

Might check out IRS Publication 590 - Individual Retirement Arrangements.

See pages 30-35 at http://www.irs.gov/pub/irs-pdf/p590.pdf

"If there are no distributions, or if the distributions are not large enough, you may have to pay a 50% excise tax on the amount not distributed as required."

And pages 39-52 (especially regarding Excess Accumulation/Insufficient Distributions commencing on page 50)

A quick Google:

http://www.irs.gov/retirement/article/0,,id=96989,00.html

http://www.finance.cch.com/sohoApplets/RetireDistrib.asp

http://www.bankrate.com/brm/itax/news/20010321b.asp

http://www.tdwaterhouse.com/planning/retirement_center/retirement_advisor/livingretire/rmd_planner.html

"If you fail to take the minimum, the Internal Revenue Service stands ready to confiscate 50% of the shortfall. That's the penalty if you fail to take the minimum. In the past, the IRS didn't have a way of knowing if you didn't comply. Now, however, in the years to come, our IRA company will be sending us and our partners at the IRS a notice telling us the exact amount we are required to take."

At http://www.estateattorney.com/irarbd.htm

Look especially at page 3, right hand block at

http://www3.prudential.com/investing/pdfs/URMD42103Final.pdf

Penalty for failing to meet RMD, income tax on RMD, and since this has gone on for years, penalties for failing to pay tax timely.

Letting this situation persist will be an incredibly expensive education!!!

Regards, JAFO
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