A Simple RMD Mistake That Can Cost Retirees Thousands

Do you know exactly what your required minimum distribution should be? Did you take more than you had to last year? If you need extra cash, there could be a better place to get it.

A woman with a dismayed look on her face stands with her chin resting on her hand.
(Image credit: Getty Images)

It is fairly common for people taking required minimum distributions out of retirement accounts, such as IRAs, to pull out more than the required amount, often without even being aware they are doing so — triggering unnecessary taxes. Because retirees are often using retirement accounts for income, it’s very common for them to contact a well-meaning employee at their financial institution and tell them to set them up to get monthly income from their IRA that may be more than their RMD amount.

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Mike Piershale, ChFC
President, Piershale Financial Group
Mike Piershale, ChFC, is president of Piershale Financial Group in Barrington, Illinois. He works directly with clients on retirement and estate planning, portfolio management and insurance needs.