The Financial Industry Regulatory Authority (FINRA) has issued an investor alert that answers common questions about advisers and their clients have about required minimum distributions (RMDs) in traditional IRAs.
The publication explains the amounts individuals must withdraw annually from a traditional retirement savings plan once they reach the mandatory age for making withdrawals. For traditional IRAs, the IRS says individuals must take their first RMD by April 1 of the year following the calendar year in which they reach 70.5 years of age.
“Our alert is designed to provide basic information and answer a number of vital questions about RMDs,” says Gerri Walsh, senior VP of Investor Education at FINRA. “Making a mistake can result in tax penalties, so it’s important to be informed.”
The alert answers questions about how to calculate RMDs, the reporting obligations of brokerage firms and what to do in the event of a mistake, among other issues.
The full Q&A is available here.