Fidelity and Vanguard warn retirees: Missing RMD deadline triggers 25% IRS penalty
By
Damilola Esebame
21h ago· 5 min readenNews
Summary
Fidelity Investments and Vanguard are warning retirees about the high risk of missing Required Minimum Distributions (RMDs) from traditional IRAs and 401(k) plans before the December 31 deadline. The IRS penalty for missed withdrawals is 25% of every dollar not withdrawn on time. Both firms outline correction paths, penalty relief options, and filing requirements for those who fall short of the legal minimum.
Source
bskyFidelity and Vanguard warn retirees: Missing RMD deadline triggers 25% IRS penaltybit.lyKey quotes
· 3 pulledMissing that withdrawal can trigger an IRS penalty equal to 25% of every dollar not withdrawn on time, according to the Internal Revenue Service.
Fidelity Investments and Vanguard are both highlighting this risk in recent retirement guidance, warning that the mistake is far more common than most people assume.
Fidelity's guidance outlines the penalties, correction paths, and filing requirements that apply when a withdrawal falls short of the legal minimum.
Millions of retirees with traditional IRAs and 401(k) plans must take required minimum distributions (RMDs) before the December 31 annual deadline.
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