A new year resets the required minimum distribution (RMD) obligations for retirees, and neglecting these requirements can lead to significant penalties from the IRS. Failing to withdraw the proper RMD incurs a 25% penalty on the missed amount, which can be reduced to 10% if corrected within two years. Vanguard research indicates about 7% of its IRA holders missed their RMDs in 2024, averaging over $1,100 in penalties. Missed RMDs from IRAs could result in up to $1.7 billion in penalties annually.
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