National Catholic Forester

National Catholic Forester 14 advantage of a spousal rollover rather than an inherited account is that you need not begin taking RMDs until you reach age 70½. But watch out for a potential tax trap: If you're under age 59½, and you wish to access your spouse's retirement funds now, you'll be subject to a 10% early withdrawal penalty (unless you qualify for an exception, such as ¿QDQFLDOKDUGVKLS8QGHUWKHVHFLUFXPVWDQFHV you're better off keeping some or all of the funds in an inherited account, from which you can withdraw penalty-free. Sidebar RMDs: When and how much? If you own a traditional IRA or a non-Roth TXDOL¿HGSODQDFFRXQWWKHWD[FRGHUHTXLUHV\RX to begin taking required minimum distributions (RMDs) once you reach age 70½. Generally, you determine the amount of your RMD by taking your account's fair market value as of the end of the preceding year and dividing it by your life expectancy (pursuant to IRS tables). For the year in which you turn 70½, you have until April 1 of the following year to take \RXU¿UVW50'$IWHUWKDW50'VDUHUHTXLUHG by December 31 of each year. 7KHUH¶VDQH[FHSWLRQIRUNDQGRWKHUGH¿QHG contribution plans: If you continue to work after you turn 70½, and you own less than 5% of the employer's company that sponsors the plan, you need not begin taking RMDs until April 1 of the year following the year in which you stop working. Last, you're not required to take lifetime distributions from Roth accounts, although your QRQVSRXVHEHQH¿FLDULHVDUHUHTXLUHGWRWDNH RMDs after your death. © 2016 Thomson Reuters. Reprinted with permission. Retirement Account 5 Tax Traps To Avoid: continued from page 13 to pay for food. At the same time, many survey respondents had misconceptions about what expenses Medicare and Medicaid cover, leaving them unprepared to handle the tremendous costs associated with the disease. Taken WRJHWKHUWKHUHVXOWVRIWKHVXUYH\SRLQWWRWKHVLJQLŅFDQWŅQDQFLDOEXUGHQSODFHGRQIDPLOLHVEHFDXVHWKHLUIULHQGRU family member with Alzheimer's disease or another dementia can no longer afford to take care of themselves. © 2016 Alzheimer's Association®. Reprinted with Permission. www.alz.org/facts/ 2016 ALZHEIMER'S DISEASE FACTS AND FIGURES continued from page 10

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