Whether you are still working or retired, you should periodically review your IRAs. Here are few things to remember.
If you’re still working, review the 2019 IRA contribution and deduction limits to make sure you are taking full advantage of the opportunity to save for your retirement. You can make 2019 IRA contributions until April 15, 2020.
If you exceed the 2019 IRA contribution limit, you may withdraw excess contributions from your account by the due date of your tax return (including extensions). Otherwise, you must pay a 6% tax each year on the excess amounts left in your account.
Required minimum distributions
The SECURE Act, which became law on December 20, 2019, made a major change to the RMD rules. If you retire at the age of 70½ in 2019, the prior rules apply and you must take your first RMD by April 1, 2020. If you reach 70 ½ in 2020 you must take your first RMD by April 1st of the year after you reach 72. You can calculate the amount of your IRA required minimum distribution by using our Worksheets. You must calculate the required minimum distribution separately for each IRA that you own other than any Roth IRAs, but you can withdraw the total amount from one or more of your non-Roth IRAs. Remember that you face a 50% excise tax on any required minimum distribution that you fail to take on time.