Watch Out, Boomers, Here Comes 70

Tax Plan­ning ▶ Manda­tory pay­outs from sav­ings plans may trig­ger new taxes ▶ “Once you hit 70½, you’re re­ally out of the sweet spot”

Bloomberg Businessweek (North America) - - Focus On/ Retirement -

About 75 mil­lion baby boomers be­gan turn­ing 70 this year. If you’re among them, there are crit­i­cal de­ci­sions to make about your re­tire­ment ac­counts and fi­nances in gen­eral.

Why is 70 the magic num­ber? U.S. tax law stip­u­lates that you must take your first re­quired min­i­mum dis­tri­bu­tion (RMD) from your in­di­vid­ual re­tire­ment ac­count and 401(k) ac­counts in the year you turn 70 ½ (or up to April 1 of the fol­low­ing year) and pay in­come taxes on it. Those who don’t com­ply face a 50 per­cent penalty on that amount. “This is a ma­jor shift if you’re a boomer,” says re­tire­ment ad­viser Ed Slott, founder of Irahelp.com. “All this

Pro­jected share of U.S. pop­u­la­tion 70 or older

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